CHANGE IN DEMAND WITH RESPECTIVE OF CHANGE IN PRICE

CHANGE IN DEMAND WITH RESPECTIVE OF CHANGE IN PRICE

INRODUCTION:

                                The law of demand states that purchased quantity is inversely proportion with price. it means if the price increases, demand will decreases. It is because of consumer’s opportunity cost, consumer will choose the next best option with low price. 

TABLE INDICATING THAT CHANGE IN DEMAND WITH RESPECTIVE OF CHANGE IN PRICE:

PRICE (Y -AXIS)	DEMAND (X-AXIS)
100	20
80	40
60	60
40	80
20	100

GRAPH INDICATING THAT CHANGE IN DEMAND WITH RESPECTIVE OF CHANGE IN PRICE:

ASSUMPTIONS:

• ·         Habits, tastes remain constant
• ·         Value of money & income of people will remain constant
• ·         Price of substitutes will remain constant

EXEMPTIONS:

• ·         Giffen goods (cheap goods) ex: vegetables , petrol  etc.,
• ·          prestigious goods (costly goods) ex: I phone, branded cars etc.,

EXAMPLES:

• ·         Amazon sale (when of price of the product decreases people buy           purchase in high quantity)
• ·         Festival offers etc.,