Overview
The Law of Demand is a fundamental principle in economics that describes how the quantity demanded of a good changes in response to price fluctuations. It highlights the inverse relationship between price and quantity demanded, meaning that as prices fall, consumers are more likely to purchase more ...
Key Terms
Example: The demand for ice cream increases during summer.
Example: The demand curve for coffee slopes downward.
Example: At $2 per loaf, the market for bread is in equilibrium.
Example: If the price of tea rises, people may buy more coffee instead.
Example: If the price of bread falls, consumers feel richer and may buy more.
Example: A rise in consumer income can shift the demand curve to the right.
Related Topics
Supply
The relationship between the price of a good and the quantity supplied, essential for understanding market dynamics.
intermediateMarket Equilibrium
The point where supply equals demand, determining the market price and quantity of goods sold.
intermediateElasticity
The responsiveness of demand or supply to changes in price, crucial for pricing strategies.
advancedKey Concepts
PriceQuantity DemandedDemand CurveMarket Equilibrium