The Laws of Supply and Demand - 4<Tab/> The ''law of demand'' states that, all other variables remaining the same, the higher the price, the less the quantity demanded. This can be seen in the diagram to your left. Fred the butcher notices that when the price of beef is $6 per kilogram, 150 kilograms are bought each week. When the price of beef is $8 per kilogram, 100 kilograms are bought each week. The …
showed first 75 words of 278 total

showed last 75 words of 278 total
…up'' prices. Can you see this effect in the diagram to your right? <Tab/> Similarly, competition between sellers of the product tends to see prices fall, as they try to attract buyers. Markets generally reach an equilibrium price and quantity, where suppliers and consumers reach a compromise. Setting prices too high can lead to low sales, and the potential for making a loss. Demanding low prices may lead to no purcha