Law of Demand curve

Law of Demand curve:-

                               It states that when there is a increase in price,then  there will be decrease in demand. Thus it represent a inverse relation between price and the demand .

 Example:- When the price of an mango raises Rs.0.95 to Rs. 0.75,the quantity demand will increase.Most of the members are now willing to buy the mango at Rs.0.75 .

Demand curve are two types:-

       1.Individual demand curve
       2.market demand curve


Individual demand curve:-

                              It is graphical representation price and quantity Fig no:-3


         

Market demand curve:-

                    In this graph shows the realtion between price and puruchases

There are three accepted of explanations of why demand curve goes donwards

                1.  Income effect

                 2.Substituition effect

                3. Law of dimishing marginal utility

      Income effect:-

                 This mainly concentrates on why curve slope downwards

Substituition effect:-

                As the price decreases the item will get very low expense.Then all the people will get attaachted because its very less cost.

   Law of dimishing marginal utility:-

                  It is inversely proportional to price and quantity.