normal and inferior goods, the law of demand, substitute goods, business cycle, exchange rates
An increase in the price of a good or service typically leads to a decrease in the quantity demanded. This is known as the law of demand, one of the most fundamental principles in economics. It describes the inverse relationship between a good’s price and the quantity that consumers are willing to buy. There are many real-world examples that illustrate the negative relationship between price and quantity demanded. If your local restaurant increases prices, you may cut your meals out. If coffee becomes more expensive, you may decide to cut back by one cup.
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