The Law of Demand

Law of Demand

• The law of demand establishes an inverse relationship between price and quantity demanded; as price decreases, quantity demanded increases, and vice versa.
• It describes how consumers' willingness to purchase a product changes with its price, generally leading to higher demand at lower prices.

Demand Curve

• A demand curve graphically represents the law of demand, plotting quantity demanded on the horizontal axis against price on the vertical axis.
• Demand curves typically have a downward slope from left to right, illustrating the negative correlation between price and quantity demanded.

Changes in Quantity Demanded

• The law of demand indicates that a change in price causes a movement along the demand curve, resulting in a change in the quantity demanded.
• A decrease in price leads to an increase in quantity demanded, while an increase in price results in a decrease in quantity demanded.

Graphical Representation

• The graph that illustrates the law of demand is specifically called the demand curve.
• Demand curves display the relationship between price and quantity at various points, enabling analysis of changes in consumer behavior in response to price fluctuations.