Question

If we observe more rice is purchased this year than last year, we may conclude

that demand has increased and therefore price must have increased. Comment.​

Answer 1

Answer:

Here in this case price must have decreased, so that demand has increased.

Answer 2

If we observe more rice is purchased this year than last year, we may conclude  that demand has increased and therefore price must have increased.

• If the demand of rice has increased this will cause an increment in the equilibrium prices, since a change in the demand leads to a shift in the price graphs.
• The increase in demands leads the producers to raise the prices and also they will be willing to sell their goods more, therefore the output also increases.
• The demands of a particular thing increases due to several factors such as, expectations, the price of the object, size of the population, their preferences and much more.