The most basic laws in economics are the law of supply and the law of demand. Indeed, almost every economic event or phenomenon is the product of the interaction of these two laws. Conversely, the law of demand (see demand) says that the quantity of a good demanded falls as the price rises, and vice versa.
Correspondingly, what is the law of demand example?
Law of Demand. Demand is the relationship between the quantity of a good or service consumers will purchase and the price charged for that good. The law of demand states that the quantity demanded for a good rises as the price falls, with all other things staying the same.
Why is the law of demand a law?
The law of demand states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded. The reason for this phenomenon is that consumers' opportunity cost increases, so they must give something else up or switch to a substitute product.
What is an example of demand in economics?
Demand is an economic principle referring to a consumer's desire and willingness to pay a price for a specific good or service. Think of demand as your willingness to go out and buy a certain product. For example, market demand is the total of what everybody in the market wants.