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Asked by Navneet Last Modified
Answer 
Price is concidered to be changing when each value of money buys less or more of a particular commodity.
For eg: Situation: 1 rupee can purchase 1 kg of Apple
Situation 2: 1 Rupee can purchase 2 kg of Apple
Price Change affects individual in number of ways
For below points we consider price change to be negative, increasing the purchasing power of an individual
1- Increase in purchasing power : When price reduces, an individual can buy more of a commodity at a lesser price. Demand usually goes up when price reduces, since an individual have more purchasing power.
2- Increase/ decrease in Savings When price reduces, an individual have more money to save since he can buy more commodity with lesser price.
3- Increase/ decrease in investiments: The increase in Savings can also lead to increase in investment with price reduction
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