Price elasticity Essay Example

The law of supply and demand states that any changes in supply can directly impact price and affect demand. An excess of goods results in reduced consumer willingness to pay, while scarce supply with constant demand leads to higher prices due to limited availability.

Modifications to the law of supply and demand can occur for non-essential goods if substitutes exist or there is no actual requirement for a particular commodity. In these cases, even small price changes can have a greater impact on demand than the typical direct relationship. Thus, if customers do not consider an item necessary, a slight price fluctuation can lead to a significant decline in demand as unexpected price changes for non-essential products often result in consumer decisions not to purchase them. Addi