ThePrismSolutions

ThePrismSolutions

DEMAND

INTRODUCTION:-

Law of demand There is an inverse relationship between quantity demanded and its price. The people know that when price of a commodity goes up its demand comes down. When there is decrease in price the demand for a commodity goes up. There is inverse relation between price and demand . The law refers to the direction in which quantity demanded changes due to change in price.

A consumer may demand one dozen oranges at $5 per dozen . He may demand two dozens when the price is $4 per dozen. A person generally buys more at a lower price. He buys less at  higher price. It is not the case with one person but all people liken to buy more due to fall in price and vice versa. This is true for all commodities and under all conditions. The economists call it as law of demand. In simple words the law of demand states that other things being equal more will be demanded at lower price and lower will be demanded  at higher price.

Definition

1. Alfred Marshal says that the amount demanded increase with a fall in price, diminishes with a rise in price.

2. C.E. Ferguson says that according to law of demand, the quantity demanded varies inversely with price.

3. Paul A. Samuelson says that law of demand states that people will buy more at a lower prices and buy less at higher prices, other things remaining the same.

Assumptions of the law

1. There is no change in income of consumers.

2. There is no change in the price of product.

3. There is no change in quality of product.

4. There is no substitute of the commodity.

5. The prices of related commodities remain the same.

6. There is no change in customs.

7. There is no change in taste and preference of consumers.

8. The size of population remains the same.

9. The climate and weather conditions are same.

10. The tax rates and other fiscal measures remain the same.


....................


Coming Subjects

  • MATHS FOR JEE MAINS

  • PHYSICS FOR JEE MAINS

  • CHEMISTRY FOR JEE MAINS

  • HISTORY

  • C PROGRAMMING

  • JAVA PROGRAMMING