Defination and assumptions of law of demand
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Demand is desire backed by willingness and ability to pay.
Other things being constant the higher the price of the commodity, smaller is the quantity demanded and lower the price of the commodity larger is the quantity demanded
Other things being constant the higher the price of the commodity, smaller is the quantity demanded and lower the price of the commodity larger is the quantity demanded
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Definition
The quantity demanded increases with fall in prices and decreases with the rise in price keeping other things constant.
Assumptions
- Money income of a consumer.
- Taste and preference should be same.
- Population of the locality should remain unchanged.
- Price of related goods must be same.
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