Proportional increases or decreases in the perceived benefits and the price of a product result in no net change in the value of the product.

Question

Quizplus · Accepted Answer

This is the basic principle of the law of demand, where the quantity demanded of a product decreases as the price of the product increases, and vice versa. The perceived benefits of the product can also affect the demand for it, but if the increase or decrease in the perceived benefits is proportional to the change in price, then the net value of the product remains the same and the demand should remain constant.

Proportional Increases or Decreases in the Perceived Benefits and the Price