Answer the following question.
State and explain the law of demand.
Law of Demand:-
The Law of demand is one of the important basic laws of consumption. Dr. Alfred Marshall, in his book "Principles of Economics", has explained the law of demand as follows.
"Other things being constant the higher the price of the commodity, smaller is the quantity demanded arid lower the Mice of the commodity larger is the quantity demanded."
The law of demand explains the change in the behaviour of consumer demand due to various changes in price. Marshall's Law of demand describes the functional relation between demand and price. It can be expressed as D = f (P) that is demand is a function of price. The relation between price and demand is inverse because the larger quantity is demanded when the price falls and a smaller quantity will be demanded when the price rises. The law of demand is explained with the help of the following schedule and diagram.
Table No. 3.3 = Demand Schedule
Price of Mangoes
Per Kg. (Rs.)
Demand for Mangoes
As shown in the schedule when the price of mangoes is Rs. 5O/- per kg. demand is 1 kg. When the price falls to the level of Rs. 40/- per kg. and demand rises to 2 kg. Similarly, at the price of Rs. 10/- per kg. the demand for mangoes is 5 kg., whereas 4 kg. of mangoes are demanded at price Rs. 20/- per kg. This shows an inverse relation between price and demand.
In this diagram, X-axis represents demand for mangoes, whereas the Y" axis represents the price of mangoes. DD is demand! the curve which slopes downwards from left to right. In other words, its slope is negative because of the inverse relationship between price and demand.
The law of demand focuses on the basic relationship between the price of the goods and quantity demanded of the good.
According to this law, other things being constant (ceteris paribus), a consumer’s demand shares an inverse relationship with the price of a good and vice versa. In other words, if the income, price of related goods, and taste and preferences of the consumer remain unchanged, then the demand for the good moves in the opposite direction of its price.
According to the law of demand, a consumer’s demand shares an inverse relationship with the price of a good and vice-versa, ceteris paribus (other things being constant). In other words, if the income, price of related goods and a consumer’s tastes and preferences remain unchanged, then the demand of a good move opposite to the movement in the price of those goods.