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    law of demand

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    The steady increase in the demand for home computers has resulted in a massive increase in the demand for web access, yet, the price of access has been steadily declining. Using the model of supply and demand, can you provide a possible explanation for the decrease in the price of access?

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    Solution Preview

    According to the law of demand, as the demand increases, so should the product (or service, as in this case) becomes dearer or more expensive. However, over the years we have been observing that the demand for web access has been consistently increasing, but the prices are falling. In the first glance, it seems ...

    Solution Summary

    The law of demand is referenced.