Explain the relationship of price and demand through the help of a graph and what will consumer do if the price of the product rises? 10 marks

The relationship between price and demand is typically depicted through a demand curve on a graph. Here's a step-by-step explanation:

1. Draw a graph: The first step is to draw a graph with 'Price' on the y-axis and 'Quantity Demanded' on the x-axis.

2. Plot the demand curve: The demand curve is usually downward sloping, indicating an inverse relationship between price and quantity demanded. This means that as the price of a product increases, the quantity demanded decreases, and vice versa.

3. Understand the curve: The reason for this inverse relationship is due to the law of demand, which states that, all else being equal, as the price of a product increases, quantity demanded falls. Similarly, as the price of a product decreases, quantity demanded increases.

4. Price increase effect: If the price of a product rises, consumers will generally demand less of that product. This is because consumers have a limited budget and can only afford a certain amount of goods. If the price of one good increases, they will likely substitute it for a cheaper alternative.

5. Shift in the curve: This decrease in demand due to a price increase is represented by a movement along the demand curve to a lower quantity demanded.

In conclusion, the relationship between price and demand is an inverse one, represented by a downward sloping demand curve on a graph. If the price of a product rises, consumers will generally demand less of it and may substitute it for a cheaper alternative.