Final answer:
Price influences demand according to the law of demand, and consumer behavior can be affected by psychological price points.
Explanation:
Impact of Price on Demand
Price plays a significant role in affecting demand for goods and services. According to the law of demand, when the price of a product decreases, consumers tend to buy more of it, and when the price increases, consumers buy less. Additionally, psychologists have observed that consumer behavior can be influenced by psychological price points, where small price changes can have varying impacts on demand.
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