Demand and law of demand

>> Tuesday, May 19, 2009

Definition of Demand

Demand may be defined as the quantity which are wanted by buyers and they are willing to buy and also have capability to buy. It means , it is the total quantity of purchase by customers . Because demands must have following conditions .

1. One buyer wants to buy .

2. one buyer is willing to buy .

3. He has capability to buy . It means he has money to buy that product . If he want to buy but he has no money , then this want is not demand but it is just need .

Law of Demand

There are so many factors which affects demand , if all other things remain constant and if price will increase , there will decrease in demand . But if price will decrease , then demand will increase . This rule is called law of demand .

Assumption of demand

  1. Income of consumer remains constant .

  2. Taste of consumer remains unchanged .

  3. Govt. policies remain same.

Graphically presentation of Law of demand under demand curve :-

If we present demand curve under law of demand then we found that DD demand curve's slop must be downward or negative . You are seeing that price on oy and demand of quantity is on ox and when you make graph it will increasing downward in right side . It means if price increases , demand decreases and if prices decrease , demands increase .

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