As price falls demand will rise 3. As the price of a good rises consumers will be able to afford less of it. Thus demand for the good will fall. Higher prices for a good will also lead to consumers looking for substitutes. If Coke rise in price - consumers will begin considering Pepsi or RC Cola instead.
Substitution leads to less demand.
Elasticity of Demand 1. Some goods will be easily substituted for - this will lead to large changes in demand for small changes in its price. When this occurs one says that demand is Highly Elastic . Some goods are difficult to substitute or impossible to substitute for. This means that changes in price will have small or no effects on demand for the product.