Final answer:
When the price of a product increases, the amount purchased declines due to the law of demand. The extent of the decline depends on the price elasticity of demand.
Step-by-step explanation:
When the price of a product increases, it generally leads to a decline in the amount purchased, which is known as the law of demand. This happens because an increase in price makes the product less affordable for consumers, reducing their willingness and ability to purchase it.
For example, let's say the price of a chocolate bar increases from $1 to $2. As a result, some consumers may decide to buy fewer chocolate bars or choose alternative snacks that are more affordable.
It's important to note that the extent of the decline in the amount purchased depends on the price elasticity of demand. Inelastic goods have a smaller decline in quantity demanded compared to elastic goods.