How is the price of an item related to the quantity demanded?

Solution

VerifiedThe relationship between price and demand is that as product prices increase, demand will tend to decrease, while when prices fall, demand increases, since there will be incentives to buy and consume.

This relationship can be determined in two ways. Through an Individual’s Demand Schedule, which is simply a table that measures the prices and quantities demanded. The values will have an inverse relationship, higher price lower quantities and vice versa. A second way to measure this relationship is through a graph that expresses the demand curve, where prices are on the Y axis and the quantities supplied on the X axis. Assuming that there are no other variables that affect the price, this curve will have a negative slope, showing the inverse relationship between the price and the demand.

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