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My reaction:
My reaction to a price change of an item would be different when the price increases or the price decreases. It really depends on the scenario and what's happening to the price of the product.
If the price of an item changed by increasing the price, I would probably probably be mad because I wouldn't want to pay more for a product that use to be cheaper when I bought it before.
If the price of an item changed by decreasing the price, I would probably be happy because I am paying less for an item that use to cost more before, meaning that I am saving money because the price of the item is cheaper than before. This is probably a common reaction between many people due to the fact that the product got cheaper.
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Definitions:
Demand:
Demand is the quantity of a product. For example, high demand means more quantities of the product, low demand is lower quantities of the product.
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Why does this illustrate the concept of demand?
In this scenario, this illustrates the concept of demand because the price change of a product corresponds to the demand of the product.
When the price of a product decreases, that means that the products demand is low, meaning that they don't have to make as much of those products since customers don't really buy it, and they don't need to spend so much money on it, which is why it's getting cheaper. Companies wouldn't increase the price of a product if no one is buying it. Lowering the price for a low demand product will increase it's chance of being bought.
When the price of a product increases, that means that the products demand is high. This means that the company that is selling the product would increase the price since a lot of people are buying it, and increasing the price would get them more money. Even though the price increased, the demand for the product is still high, meaning that people would still buy the product even though the price increased.
It's very important for a company to check the demands of their products, so they know which ones they should make more of and which ones they should slow down on. High demand products = business, which they could rise the price so they could make more money off of people buying the product. Low demand products would lower the price so that people would keep buying the product.
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-Julie
