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reword per talk page: A fall in price tends to increase the quantity demanded by the public, and a rise in price tends to decrease the quantity demanded.
Building on last week's class, we can now state the three most basic principles of economics with respect to price:
Building on last week's class, we can now state the three most basic principles of economics with respect to price:
*A fall in price tends to increase demand, and a rise in price tends to decrease the demand. '''LOWER PRICE MEANS HIGHER DEMAND''' (and higher price means lower demand). This is known as the '''Law of Demand''': the demand changes inversely with price.
*A fall in price tends to increase the quantity demanded by the public, and a rise in price tends to decrease the quantity demanded. '''LOWER PRICE MEANS HIGHER DEMAND''' (and higher price means lower demand). This is known as the '''Law of Demand''': the demand changes inversely with price.
*When demand exceeds supply at a given price, the price tends to rise as sellers take advantage of the high demand by increasing price. Similarly, when the supply exceeds the demand, the price tends to decrease as sellers try to sell their unsold goods.
*When demand exceeds supply at a given price, the price tends to rise as sellers take advantage of the high demand by increasing price. Similarly, when the supply exceeds the demand, the price tends to decrease as sellers try to sell their unsold goods.