Microeconomics in English
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| Law of Demand | Demand | Economics in English | zea tutor |
Law of Demand and its Application
Definition of Demand:
“Demand
is the quantity of the good which a consumer is willing to buy at the specific
price in the given or proper time”
There are two basic
elements or condition for demand:
Will to purchase.
Power to purchase.
Law of Demand:
“Demand
is the relationship between price of a good and its demand. The law explains
that when the price of a good increases, the quantity of its demand will
decrease and on the other hand if price decreases, its quantity demanded will
increase with no change in other goods”
EXPALINATION OF TABLE
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| Law of Demand | Demand | Economics in English | zea tutor |
We see that when the price
of a good (say a toffee), is Rs:10, the demand for the good is 100 units. When
price decreases to Rs.8, its demand increases to 150 units. The price of the
good continues to decrease & reaches at Rs.2 and demand for it goes to 300
units increasingly.
It proves that if price decreases the demand for that will increase and if price increase the demand for that good decrease.
EXPALINATION OF GRAPH
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| Law of Demand | Demand | Economics in English | zea tutor |
The graph on side explains
the law of Demand. The prices of the good is measured on y- axis and quantity
of demand is measured on x-axis.
We may see that the demand
curve DD is a negative sloped verve which goes from left to right downwards and
indicates the price of the good is decreasing and the demand for the good is
increasing at the same time without any pause or break.
The price of the good
decreases from Rs.10 to Rs.2 and demand for it reaches at 300 units from 100
units in the specific time proving that the price of and demand for the good
acts inversely.
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