Use app×
Join Bloom Tuition
One on One Online Tuition
JEE MAIN 2025 Foundation Course
NEET 2025 Foundation Course
CLASS 12 FOUNDATION COURSE
CLASS 10 FOUNDATION COURSE
CLASS 9 FOUNDATION COURSE
CLASS 8 FOUNDATION COURSE
0 votes
9.5k views
in Economics by (69.0k points)

Elaborate the law of demand, with the help of a hypothetical schedule.

1 Answer

+1 vote
by (73.7k points)
selected by
 
Best answer

According to law of demand, "More quantity is demanded due to fall in price and less quantity is demanded due to rise in price, when other things remains constant." Thus law of demand shows the negative relationship between price of a commodity and its quantity demanded. According to law of demand, demand of a commodity is a function of its price.

Dx = f (Px) 

here, Dx = Demand of X commodity, Px = Price of X commodity

Assumptions of law of demand : 

(i) Price of other related goods remains constant. 

(ii) Income of the consumer remains unchanged. 

(iii) Psychological factors like habits, taste, preferences of the consumers remains constant. 

(iv) There is no expectation about the future price changes, etc. 

Explanation of the law

According to law of demand shows the inverse relationship between price of concerned commodity and its quantity demanded. This inverse relationship can be seen in demand schedule and demand curve. The negative slope of the demand curve is due to the inverse relationship between price of the commodity and quantity demanded. When the price of commodity was OP the consumer was demanding OQ units of the commodity. As the price rises to OP1 the demand falls to OQ1 (which is contraction in demand) and as the price falls to OP2 the demand rises to OQ2 (which is expansion in demand). 

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

Categories

...