Correct the statement

Question

Demand increases, causing prise to rise, higher price cause demand to fall. Therefore, price fall back to their original levels

Answer 1

Answer 2

Higher prices cause quantity demanded to fall, not demand. Quantity demanded is only affected by price, whereas demand is affected by factors such as income levels, tastes, population, price of substitutes, etc. That is the error in the statement. Also, prices don't always have to fall back to their original levels. There are reasons (as I stated) that demand increases in a market.