Saturday, July 28, 2018

The Law of Demand.

The law of demand states that the quantity of a good demand is inversely related to the good's price when price goes up, quantity demanded goes down, when price goes down, quantity demanded goes up.Hence,more of a good will be demanded the lower it's price, other things constant or alternatively:
Less of a good will be demanded the higher it's price, other thing constant. The law is fundamental to the invisible hand's ability to co-ordinate individual's desires as price change how much of a particular good they are willing to buy.
To see that the law of demand makes intuitive sense, just think of something you had really like but can't afford. If price is cut in half, you and other consumers become more likely to buy it . Quality demand goes up as price goes down.

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