Explain The assumptions to the law of demand
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Main assumptions of the law of demand are as follows: Prices of the related goods do not change. Incomes of the consumers do not change. Tastes and preferences of the consumers remain constant. No expectation of the consumer to any change in the price of the commodity in the near future
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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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