**Demand for goods and their prices under normal times** - Correlation is (a) positive, (b) negative, (c) zero, or (d) none?

In economics, the relationship between demand for goods and their prices is crucial in understanding market behavior. The correlation between demand and prices helps determine how changes in price affect the quantity of goods demanded, and vice versa. Under normal circumstances, there is a clear correlation between demand and prices, and this correlation is generally positive.

**Positive Correlation:**

A positive correlation means that as the price of a good increases, the quantity demanded decreases, and as the price decreases, the quantity demanded increases. This relationship is known as the law of demand. It is based on the assumption that consumers are rational and seek to maximize their utility or satisfaction. When prices are higher, consumers tend to be less willing or able to purchase goods, resulting in a decrease in demand. Conversely, when prices are lower, consumers are more likely to buy the goods, leading to an increase in demand.

**Example:**
- Let's consider the market for smartphones. If the price of smartphones increases significantly, consumers may opt to purchase cheaper alternatives or delay their purchase, resulting in a decrease in demand for smartphones.
- On the other hand, if the price of smartphones decreases, more consumers may be inclined to buy them, leading to an increase in demand.

**Factors Influencing Demand and Prices:**

Several factors can influence the demand for goods and their prices, such as:
- Consumer income: Higher incomes generally lead to increased demand for goods, as consumers have more purchasing power.
- Consumer preferences: Changes in consumer tastes and preferences can affect the demand for goods. For example, if there is a shift towards healthier food options, the demand for organic products may increase.
- Price of related goods: The prices of substitute and complementary goods can influence the demand for a specific good. If the price of a substitute good decreases, consumers may switch to that alternative, resulting in a decrease in demand for the original good.
- Market competition: The level of competition in a market can impact both demand and prices. In a highly competitive market, businesses may lower their prices to attract more customers.

**Conclusion:**

In conclusion, under normal circumstances, there is a positive correlation between the demand for goods and their prices. As prices increase, the quantity demanded tends to decrease, and as prices decrease, the quantity demanded tends to increase. However, it is important to note that other factors also play a significant role in influencing demand and prices, and the relationship may not always be linear.