define law of demand. discuss its assumptions and factors affecting demand
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LAW OF DEMAND:
The law of demand is a microeconomic law that states, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.
♂♂Assumption:
1. No change in habits, customs and income of consumers, 2. This law does not apply on necessaries of life, 3. Joint demand, 4. Articles of distinction, 5. Fear of shortage in future, 6. Change in the price of substitutes, 7. Fear of a rise in price in future and 8. Ignorance
♂♂factor affecting demands:
1. Price of the Given Commodity
2. Price of Related Goods
3. Income of the Consumer
4. Expectation of Change in the Price in Future
Hope it helps!!!!
:)
LAW OF DEMAND:
The law of demand is a microeconomic law that states, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.
♂♂Assumption:
1. No change in habits, customs and income of consumers, 2. This law does not apply on necessaries of life, 3. Joint demand, 4. Articles of distinction, 5. Fear of shortage in future, 6. Change in the price of substitutes, 7. Fear of a rise in price in future and 8. Ignorance
♂♂factor affecting demands:
1. Price of the Given Commodity
2. Price of Related Goods
3. Income of the Consumer
4. Expectation of Change in the Price in Future
Hope it helps!!!!
:)
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