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LAW OF DEMAND by Alice Ken
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LAW OF DEMAND |
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Education,Law,Writing
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Law of demand is a fundamental concept in economics. Demand law works hand in hand with the law of supply on explaining how the resources are allocated and to decide prices of the commodities. The elastic demand occurs if the amount changes when the price does but if the measure does not change it is called inelastic of demand. Demand law summarizes the consumer behavior on the effects of price changes. The law of demand states that all things remaining equal, as the prices of the commodity increases, the consumer demand for that commodity will decrease and vice versa. Demand can be defined as one's needs or wants. In the law of demand, the higher the price the lower the quantity demanded. This is because the opportunity cost of the consumers to acquire commodities increases and the consumers have to find another way to acquire more commodities even if it will be much expensive. The main tools that are used to summarize the relationship between the quantity demanded and the price in the law of demand are the demand curve and demand schedule. The demand curve is a graphical representation of the quantity demanded at each price. The demand schedule is the tabulation representation of the quantity demanded at each price. Ceteris paribus is a Latin word used in the law of demand that means all other things remain equal. Retailers are used to the law of demand when offering a sale.
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