What is Price Effect?

Price Effect is when something becomes more or less popular just because its price changes.

Imagine you have a favorite candy bar that costs $1. You buy it every day after school. One day, the store raises the price to $2. Suddenly, it feels like a big treat instead of a regular snack, so you might decide to buy it only on special days. That’s the Price Effect in action!

• If something gets cheaper, people tend to buy more of it.
• If something gets more expensive, people often buy less of it.

Think about your favorite juice box. When it's on sale for $1 instead of $2, you might grab two packs instead of one. That’s the Price Effect making you feel like a bargain hunter!

Your mom buys milk every week. One day, she sees that the price went up, so she buys less this time. The next week, the price goes down again, and suddenly, she's buying two gallons instead of one. That’s how the Price Effect works in real life!