How does the increase in the price of an individual good or service affect consumer behavior? How does this help explain the law of demand?
According to law of demand which says that in ceteris paribus or if other things are held constant then price and quantity demanded are inversely related
it means if price increases the quantity demanded will decrease and vice versa
so in the real market also if the factor present is only price then law of demand works
it means for consumer who is price sensitive if he findsthat price of a good or service rises than the quantity demanded by him or her will decreases.
This is also called elastic demand in which the consumer is price sensitive and company has to take care that which good and servive should be categorised under elastic demand and which should not be not
How does the increase in the price of an individual good or service affect consumer behavior?...
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