Economics Notes for Class 12 Law of demand
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Economics note Law of demand
Statement: The Law of demand states that other things remaining constant, the demand for a commodity is inversely related to its price.
D = 1/P
- There should be no change in the price of related goods. The related goods include the complimentary as well as substitute goods.
- There should be no change in the income of the consumer.
- There should be no change in the taste and preference of the consumer.
- There should be no change in the number of family members, weather conditions, etc.
Demand Schedule: A demand schedule is a tabular representation of different quantities of a commodity demanded at different prices during a given period of time.
Demand Curve: A demand curve is the graphical representation of the demand schedule.
Explanation: Since there is an inverse relationship between the demand for a commodity and its price, the demand curve is sloping downward from left to right. In the figure above, as the price of the commodity is P0, its demand is Q0. As the price of the commodity rises from P0 to P1, its demand falls from Q0 to Q1. Hence, the demand curve is a negatively sloped curve.
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