When price increases then quantity demanded decreases.why?
http://www.argmax.com/mt_blog/archive/pokemonf1.gif If that link works click it or copy and paste in your address bar. Price is on the y-axis and Quantity on the x-axis. Now a price increase would shift horizontal line in the graph up (or move higher up along the y-axis). Thus if you draw a line above the current horizontal line and stop where the new line hits the demand line then draw a line down to the Quantity line. You will see the new quantity is less that equilibrium quantity. If you are looking for a less graphical answer: Consumer are less willing to buy a good when the price has increase.
