Define Law of Demand and derive a demand curve
Define Law of Demand and derive a demand curve
According to Prof. Samuelson “The law of demand states that people will buy more at a lower price and buy less at higher prices. Other thing remaining the same.”
It is the experience of every consumer that when prices of the commodity fall, they buy more and vice versa. There is thus an inverse relationship between the price of a product and the quantity demanded. The economist named this inverse relationship between quantity demanded & Price is Law of Demand. The functional relationship between the Quantity and price of a commodity can be expressed in mathematical language.
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QdX = f (Px , M-, P0, T,—-N )
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QdX = quantity demanded of commodity X
f = function of independent variable
PX = Price of commodity X
M = Money income of the consumer
Po = Price of other commodities
T = Taste of consumer
N = Unknown factors
(The bar on the Top of M, P0 ,T means that they are kept constant)
Assumption:-
Income of the consumer does not change.
Tastes of the buyer do not change.
The population should not change.
People do not expect further changes in price.
No discovery of new substitute.
No change in the external value of money.
Homogeneity.
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For Correction and Improvements please use the comments section below.
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NJMH is working as Deputy Conservator of Forests in Balochistan Forest & Wildlife Department (BFWD). He is the CEO of Tech Urdu (techurdu.net) Forestrypedia (forestrypedia.com), Majestic Pakistan (majesticpakistan.pk), All Pak Notifications (allpaknotifications.com), Essayspedia, etc & their YouTube Channels). He is an Environmentalist, Blogger, YouTuber, Developer & Vlogger.
