Law of Demand | intro, table, diagram |
LAW OF
DEMAND
INTRODUCTION:-
Demand refers to the quantity of
commodity which people are ready to buy at different prices. In economics means
willingness to purchase and power to purchase. If either of the two conditions
of demand is not fulfilled then demands does not exist. The law of demand
explains relation between quantity demanded and its price. If price falls the
demand will expand and vice versa.
Definition:-
Law
of demand is defined as,
“Other things remaining the same, quantity demand of a
commodity increases with fall in price and decrease with rise in price.”
Another definition is
“People
will buy more at lower prices and buy less at higher prices, other things
remaining the same.”
It
can be mathematically written as,
Qd = f
(P)
Where, QD = dependent variable and P =
independent variable
Qd =
quantity demand
P =
price of commodity
f =
the function of quantity demand and price
There
is negative relation between Qd and P.
It means as P Qd
and P Qd
TABLE/Schedule
Combination
|
Price
|
Quantity
demand
|
A
|
5
|
10
|
B
|
4
|
20
|
C
|
3
|
30
|
D
|
2
|
40
|
E
|
1
|
50
|
EXPLANATION:-
The above table consists of
three columns, first column shows different combinations purchased by the
consumers, second column shows different prices of a product and third column
shows different units of commodity purchased by the consumer. As price of
product decreases, consumer can increase demand of the product, it shows
negative relation between price and quantity demand of a product.
EXPLANATION:-
Quantity demand have been measured on
x-axis and price on y-axis, as price decreases its demand will be increases and
if price increase and quantity demand will be decrease and we get demand curve which has negative slope
and shows negative relation between price and quantity demand.
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