What is law of demand?
There is an inverse relationship between the price of a product and the quantity demanded.
The law of demand is a fundamental concept in economics which states that, all other things being equal, the quantity of a good or service demanded by a consumer will decrease as the price of that good or service increases, and vice versa. This means that there is an inverse relationship between price and quantity demanded – when the price of a good or service rises, fewer people will be willing or able to buy it.
The law of demand is a critical principle for understanding how markets work. It implies that as prices increase, demand will typically decrease, creating an equilibrium point at which the market clears. This law is based on the assumption that consumers act rationally and in their own self-interest, seeking to maximize their own satisfaction or utility with the goods and services they purchase.
In summary, the law of demand helps us predict how consumers will respond to changes in prices for goods or services, and is an essential tool for businesses, policymakers, and economists alike.
More Answers:
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