[Answer] Why do prices increase when demand for a product is high?

Answer: Companies know that people will be willing to spend more to get an in-demand product.

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Why do prices increase when demand for a product is high? Wed Dec 21 2016 · The high demand will increase the prices of the goods and Consumers will only buy the quantity they need not in excess of what they need. (D) Companies know they can stop production and still make money on sales: This option is incorrect . When demand is high price for the product increases . This is because people are willing to pay more for a product that they really want especially when they perceive that the supply is low. When demand is low the price for the product decreases . This also occurs when the product is readily available; in other words it is in ready supply. If there is a decrease in supply of goods and services while demand remains the same prices tend to rise to a higher equilibrium price and a lower quantity of goods and services. Step-by-step explanation:The prices increase when the demand of a product is high because e...

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