In a competitive market, when do buyers tend to purchase more of a good?

In a competitive market, buyers are more likely to purchase more of a good when the price decreases. This relationship is central to the law of demand, which states that, all else being equal, as the price of a good falls, the quantity demanded by consumers increases.

When prices drop, consumers may view the good as being more affordable, prompting them to buy more of it, not only because they can stretch their budget further but also because they may perceive a better value. This increased buying behavior is driven by the desire to obtain more of the good at a lower cost, leading to a higher quantity demanded in response to the lower price point.

Conversely, when prices increase, buyers tend to purchase less due to the higher costs. Similarly, conditions such as surplus or shortages influence market dynamics differently; a surplus typically leads to downward pressure on prices as sellers try to clear excess inventory, while a shortage usually results in rising prices due to higher demand than available supply. Therefore, the scenario where buyers purchase more in response to a price decrease aligns with fundamental economic principles regarding supply and demand.