Question

Explain how increased demand for bread affects its price in the short run? In the long run? Can an increase in demand for a product ever lower its price? If so, why?

Answer 1

In the short run as we all know one of the factors of production should be constant or fix and according to law of demand price and quantity demanded and inversely relatedin the short run

If demand increases for bread then price will decrease but if we consider this in the long run then in the long run all the factors are variable and due to more demand in the long run can causes less supply in the market and due to less supply the price will increase

So we cannot say that the increase in demand for a product ever lower its price

Answer is NO