distinguish between law of demand and elasticity of demand
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Difference between The law of demand and elasticity of demand
The difference between the law of demand and elasticity of demand can be understood inquantitative and qualitative term.
The law of demand
shows the inverse relationship between price and demand in qualitativeterm. The change in demand will not be proportionally against the change in price. According to thelaw, the rise in price will lead to decrease in demand and the fall in price will lead to increase indemand for a good and service.The law of demand can be compared with seesaw swing. As seesaw one side comes down, otherside goes up, same with the law of demand as price comes down, demand goes up and when pricegoes up demand comes down.Thus the law can be stated as
“
A rise in the price of a product or service tends to decrease indemand and a fall in price tends to increase in demand for a product whiles other things remain
same.”
The phrase “other things remain same” means that consumer’s
taste and preference, income of theconsumer, price of the inter-related goods etc should remain constant. Only then this law will beapplicable.
According to the Marshall,”
The greater the amount to be sold, the smaller must be the price atwhich it is offered in order that it may find purchasers; or, in other words, the amount demanded
increases with a fall in price, and diminishes with a rise in price
Answered by
0
Difference between The law of demand and elasticity of demand
The difference between the law of demand and elasticity of demand can be understood inquantitative and qualitative term.
The law of demand shows the inverse relationship between price and demand in qualitativeterm. The change in demand will not be proportionally against the change in price. According to thelaw, the rise in price will lead to decrease in demand and the fall in price will lead to increase indemand for a good and service.The law of demand can be compared with seesaw swing. As seesaw one side comes down, otherside goes up, same with the law of demand as price comes down, demand goes up and when pricegoes up demand comes down.Thus the law can be stated as “A rise in the price of a product or service tends to decrease indemand and a fall in price tends to increase in demand for a product whiles other things remain
same.”
The phrase “other things remain same” means that consumer’s
taste and preference, income of theconsumer, price of the inter-related goods etc should remain constant. Only then this law will beapplicable.
According to the Marshall,”
The greater the amount to be sold, the smaller must be the price atwhich it is offered in order that it may find purchasers; or, in other words, the amount demanded
increases with a fall in price, and diminishes with a rise in price.”
Main characteristics of law of demand
1 It shows the inverse relationship between price and demand.2 It indicates the relation between price and demand only in qualitative term3 Price is an independent variable and demand is a depended variable as according to the law,demand varies with the change in price.4 Generally, the demand curve slope is negative and it goes downwards from left to right.
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