Apr 23 2012
Ceteris paribus, there is an inverse relationship between the price of a good and the quantity demanded by consumers. At higher prices, less of a particular good tends to be demanded, while at lower prices, more of a good tends to be demanded. Can be explained by the income effect, the substitution effect and the law of diminishing marginal utility.
About the author: Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author