Learning objective
Explain the basic relationship between price and demand.
Read the explanation, check the common trap, then practise with flashcards and questions.
At a glance
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Flashcards
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Questions
Topic
The elements of the marketing mix: price, product, promotion and place
Subtopic
Price
Study support
Understand this objective
Quick explanation
Explain the basic relationship between price and demand
- This point belongs to The elements of the marketing mix: price, product, promotion and place, especially Price.
- You need to be able to explain the basic relationship between price and demand.
- The key ideas to know are demand.
- Use the linked flashcards and practice questions to check recall, then practise applying the idea in an exam-style answer.
Key concepts
Why it matters
This objective helps connect Price to exam-style questions, flashcards, and revision notes for The elements of the marketing mix: price, product, promotion and place.
Quick student answer
Explain how a change in price can affect the quantity demanded of a product in a competitive market.
Direct answer
When the price of a product falls, consumers are willing to buy more of it, increasing the quantity demanded. Conversely, when the price rises, consumers buy less, decreasing the quantity demanded. This inverse relationship is illustrated by the downward‑sloping demand curve.
How it works
The answer demonstrates the basic cause‑and‑effect relationship between price and demand, using the correct terminology and a clear, concise explanation suitable for GCSE level.
Key terms
- Price elasticity of demand: The percentage change in quantity demanded divided by the percentage change in price, indicating how sensitive consumers are to price changes.
Common trap
Assuming demand always rises when price falls: In reality, demand may not rise if the price drop is too small, if the product is a necessity, or if consumers are not price sensitive. Always consider the context and other influencing factors.
Related questions
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Revision notestopic notes
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