what happens to supply and demand when prices rise?

Answer 1

Sometimes people are willing to buy it less, and so the demand goes down. More often it seems (to me at least), however, people will complain about it but still buy just as much before, so the demand stays the same (unless the raise is absurdly high). When this happens, whoever is raising the price just makes that much more profit.

Answer 2

If we observe that prices are going up, we have to look deeper to understand what is going on.

1. It could be a factor affecting the product directly. Supply might have decreased (a hurricane wiping out houses) or the demand might have risen (a sharp increase in the demand for houses, for example).

2. It could just reflect the overall change in prices -- inflation. Inflation occurs when the money supply increases faster than the demand for money.

Answer 3

Your question is a lot more complicated than you think. What is the product. Is it a commodity? Is it price controlled? Are there subsidies? Also rising prices doesn't really effect supply. Supply and demand affect prices.
In a purely capitalist system when demand is higher than supply prices rise and when the opposite is true they fall. But this isn't a purely capitalist system.

Answer 4

if prices rise, supply curve shifts to the right, demand to the left, equilibrium quantity sold goes down

but it comes back up after a month or two when people become accustomed to the new prices.

oh, and remember that this is a price change, not a price change due to inflation

Answer 5

Answer
price rise will shift the equilibrium point higher up ALONG the downward sloping demand curve. therefore, your supply curve will shift up while demand remains constant.

Logic
increase in price will decrease the quantity demanded of the good, given the same amount of income, consumer can only buy lesser quantity of the same good. therefore, firms will supply less quantity to the market.

Note: price increase does not cause a change in the demand, the demand function (consumer preferance) remains the same (curve remains constant), therefore the equilibrium point shifts to a higher point on the demand curve.

(assumption: the demand curve is a normal downward sloping curve)

Answer 6

You've got that backwards. An increase in supply lowers prices. An increase in demand raises them. If you think about it, it's perfectly logical. How else do you decide who gets the product? The buyer with the most money, obviously! Or would you rather get less money for a product than it's worth?

Answer 7

price rise because of supply and demand...it's generally not the other way around

Answer 8

If your demand curve increases or your supply curve decreases, or both prices will rise.

There are lots of reasons that would cause these shifts.

Answer 9

products that are in demand and are limited due to the demand and not enough products increase the prices of things, such as gas.

Answer 10

if the fee of cookies fell, theoretically the decision for might want to upward push. if milk is used in the production of those cookies, a enhance in the fee of milk might want to theoretically decrease the provision of cookies accessible. note that that's uncomplicated theory, there are different aspects to guage which includes the provision of substitutes to take advantage of (eg. a distinct variety or powdered somewhat of unpolluted). in actual lifestyles, issues received't be so elementary and uncomplicated.