Economics - This is an assignment question. Inputs from the members is very much appreciated
2006-12-04 08:07:11 · 5 answers · asked by Vijay123 3 in Education & Reference ➔ Homework Help
Because as you go from left to right on a chart showing demand the price is increasing for the product or service. The higher the price the lower the demand - it is what is called an inverse relationship.
Good Luck!!!
2006-12-04 08:10:31 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Because when something is new the demand is high, i.e. new playstation 3. Over time the supply catches up with the demand. The PS3 factory can only produce so many systems a week, if Sony is smart they won't invest $ in increasing the capacity to produce PS3, thus keeping the demand potentially high for a longer period of time. Eventually the number of possible buyers goes down or something better comes on the market that drives demand away from the product.
That wouldn't always be the case. Take an item like gasoline. Demand for gasoline continues to rise, even though it's been available for many decades. With gasoline there are ever larger numbers of possible buyers and demand with the pre-existing consumers isn't decreasing.
2006-12-04 16:17:29 · answer #2 · answered by I Like Stories 7 · 0⤊ 0⤋
I'm sure you know what a slope of a function is. The slope of this curve (also known as the derivative in calculus) is constantly decreasing as you move from left to right, indicating a decrease in demand as cost increases. Think about it, if something gets so expensive to buy, such as a pair of sneakers that would suddenly cost $600, would you or the majority of people be running out to buy it? Heck no!
2006-12-04 16:14:47 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Well.. from a logical view point.. let's say your company comes out with this wonderful new widget. Lots of people want it and start buying them.. the demand accelerates to a high point. After a while.. there are less people wanting them because some already have them. It you take this view to a competitive standpoint where another company begins to make similiar widgets some customers will purchase their and thus the demand for yours decrease.
Hope this helps!
2006-12-04 16:12:14 · answer #4 · answered by wrkey 5 · 0⤊ 0⤋
You do realize that it's typically a function of cost. . . cost gets higher, fewer people demand the good/service. Think about it. . .
2006-12-04 16:10:30 · answer #5 · answered by DJL2 3 · 0⤊ 0⤋