Question

Why increase in demand leads to increase in price

Answer 1

Answer:

increase in demand leads to increase in price because the people are interesting to buy the product and it is the time for the producer for increasing demand.....

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Answer 2

In Economics,higher demand for any good or service implies higher preference or want for that particular good or service thereby increasing its value or monetary price in the market,everything else held constant.

Explanation:

• An increase in the consumer demand of any product or service reflects higher preference or attraction towards that particular product or service by consumers or buyers.
• An increase in consumer demand can practically arise from various factors such as an increase in the consumer/buyer income level,changes in consumer/buyer expectations about the price of any product or service,changes in prices of substitute and/or compliment goods,sudden changes in personal financial situations of the consumers/buyers and so on.
• Due to an increase in consumer demand for any product or service,it generally becomes more valuable for people or its value or utility to consumers or buyers normally increases which encourages them to purchase more of that product or service.
• As any product or service becomes more valuable in terms of utility or personal value,it is understandably reflected by an increase in its market value as well or the market price of that product or service increases in the market,again considering all other market factors as constant.