The Law of Demand (With Diagram)
Law of demand
Its our general
experience that if there is fall in price then the demand of the product
increases, and when there is rise in price then the demand of the product
falls, that shows that there is a negative relationship between demand and
price , both price and demand move in an opposite direction,
so the law of demand states that there
is the negative relationship between price and demand ,as the demand for a
commodity expands with fall in its price and contracts with a rise in
its price, other things remaining the same.
This can be better
understood with the help of an example ;
Suppose in a market
the price of bananas are increased and we found that people are not buying
that product even we also because they are expensive and next day the price of
bananas fall here we found that people rushed to buy these bananas as its
price fall ,that called the negative relationship between price and demand, as
the price falls demand increases and as the price rises the demand falls.
LAW OF DEMAND CAN
BE EXPLAINED WITH THE HELP OF TABLE AND DEMAND
PRICE
OF THE COMMODITY
|
QUANTITY
DEMAND
|
10
8
6
4
2
|
10
20
30
40
50
|
From the above
table we see that as the price falls the demand rises , when the price is 10
the demand is also 10, but when the price falls from 10 to 8 the quantity
demand rises from 10 to 20,
And when price
falls from 8 to 6 the demand rises from 20 to 30 , the same with other price
variations as they falls the demand increases that shows that both moved in an
opposite direction,
BELOW IS THE DIAGRAM OF DEMAND AND
PRICE
D,D1 IS THE DEMAND
CURVE
From the x side we take the demand of the commodity , and from the y side we take the price of the commodity, when the price of the commodity is 10 both intersects each other at point A , and when price falls from 10 to 8 the demand rises from 10 to 20,then the curve starts moving downwards from point A to point B ,similarly when the price falls from 8 to 6 the demand rises from 20 to 30, demand curve moves from point B to point C, and when the price of the commodity falls from 6 to 4 ,the demand of the commodity rises from 30 to 40 that effects the demand curve moves from point C to point D, similarly when the price falls from 4 to 2 the demand rises from 40 to 50, that causes the demand curve moves from point D to point E,
When we connect all these points means point A,B,C,D,E These points creates a curve D , D1 AND THAT CURVE IS CALLED THE DEMAND CURVE
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