If a price of a product increases, the demand for its input used to produce it increases, decreases, or same?

Question

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Answer 1

In economics the demand curve is a relationship between the amount people will buy and the price. It is usually assumed to slope downward, so the amount purchased decreases with increasing price. This will therefore decrease the inputs needed to produce the product.

Answer 2

It depends. If demand for the end product decreases (as a result of the price increase) then it might result in a decrease in overall demand for the inputs. But remember that not every price increase results in lower demand. In fact, in some cases, a price increase could lead customers to believe it is a premium product.....resulting in an increase in demand. In some cases the producers of the inputs may be able to sell their goods in alternative markets. But in general economic theory, the demand for the input would decrease as the price of the product increases.

Answer 3

It depends on what the primary attraction of the product is.

If DVD's got more expensive, sales might drop.

But if the cost of a surgeon increases, would you go looking for the cheapest surgeon you can find, or do you spend more money, to get the best surgeon available. In this case demand may not change much.

In the case of certain fashion/impulse purchases, e.g. designer sunglasses, increasing price might even just push sales up.

NOTE: in each of these cases, I was talking about UNIT sales - not $ sales.

Answer 4

Increases. A higher price results in a higher quantity along the fixed supply cuve. To produce this higher quantity, the producer must invest more into inputs.

Answer 5

from an economic stand point it would decrease, but it all depends on demand.

Answer 6

There is an inverse relationship and therefore it would decrease. hope i helped you on your homework =)