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> If prices go up then demand drops That is not a true statement in Economics. Price is a result of the supply & demand functions, the scenario you're think
by iaw 10y ago
> If prices go up then demand drops
That is not a true statement in Economics. Price is a result of the supply & demand functions, the scenario you're thinking of is a reduction in supply with unchanged demand leading to an increase in price.
We really don't know if that increase in price will be large or not without more data.
- CPLX 10y agoThose of us with an academic background in economics call this a change in the quantity demanded. That said, outside of a jargon context the way the word is used here is totally fine and understandable.