At a zero price, quantity demanded will be equal to zero. An increase in market price will lead to an increase in quantity demanded. A reduction in market price will lead to a decrease in quantity demanded. A reduction in market price will lead to an increase in quantity demanded.

Question

Alfie

Business

23 February, 19:17

At a zero price, quantity demanded will be equal to zero. An increase in market price will lead to an increase in quantity demanded. A reduction in market price will lead to a decrease in quantity demanded. A reduction in market price will lead to an increase in quantity demanded.

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Answers (1)

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Issac · Answer 1

Yes a reduction in market price will lead to an increase in quantity demanded.

Explanation:

It is true that when price decreases demand increases as these two factors affects each other inversely. There is a negative relationship between price and demand and it is known as Law of demand.

If the price increases, the quantity demanded falls down (but demand itself stays the same). If the price falls down, quantity demanded goes up. People who were demanding less due to the high price will demand more if price falls as this will not affect the their pocket more as earlier.