How Demand Affects Pricing

Word cloud related to demandOne word: elasticity.

By August J. Aquila
Price It Right

Economists define demand as a schedule of the various amounts of an item (a good or service) that buyers will purchase at different price ranges during a given time period.

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According to the theory of price elasticity of demand, there is an inverse relationship between price and the quantity of an item bought. In other words, as the price of a service decreases, the quantity demanded increases and as the price of a service increases, the quantity demanded decreases.