ALLIANCE UNIVERSITY

Name:- Nischith. Bashettiyavar

Class:- B.B.A.LL.B (Hons)
Subject:- Economics
Date:- 15/09/2021
Topic:- Demand of analysis.

LAW OF DEMAND:-

Demand means desire, willings to pay for something, ability.

According to law of demand," Other things being equal, if the price of a

commodity falls, the quantity demanded of it will rise & if the price of the
commodity rises, its quantity demanded will decline."

EQUATION:-

D= f(P)

where, P= price,
D= quantity demanded.

CHARACTERISTICS:-

> Inverse relationship.

> Price independent & demand dependent variable.
> Income effect & substitution effect.

ASSUMPTIONS:-

> No changes in tastes & preference of the consumers.

> Consumer's income must remain the same.
> Price of the related commodities should not change.
> Commodity should be a normal commodity.
> No change in size of population.
> No expectation regarding future change in price.

MARKET EQUILIBRIUM:-

Equilibrium is the state in which market supply & demand balance each
other.