Final answer:
A higher price for a product results in less quantity demanded because consumers will either choose less expensive substitutes (substitution effect) or their purchasing power decreases (income effect), leading to reduced consumption of the higher-priced good.
Step-by-step explanation:
When the price of a product increases, the quantity demanded for that product typically decreases. This happens for two main reasons: the substitution effect and the income effect. The substitution effect occurs because consumers will tend to purchase less of the higher-priced product and more of other similar products that are now relatively cheaper. The income effect suggests that with higher prices, consumers have effectively less income to spend on that product, making them reduce their consumption.
These principles run counter to the idea that higher prices might cause a greater quantity demanded, which is contrary to the basic model of demand and supply. As the price increases, there is a natural limit at which the quantity demanded will begin to decline because either the product is no longer perceived as worth the price increase or the consumers' budget does not allow for the purchase at the higher price. Therefore, higher prices lead to reduced consumption of that good and can also change consumption patterns for other goods as consumers shift their spending to more affordable alternatives.