What is the law of demand?

The law of demand is a microeconomic principle. According to this principle, an increase in the price of goods or services causes the number of people who require the closure of a good or service. On the contrary, the reduction of the price of the goods or services will cause the demand for good or service to expand. In order for the demand law to be properly applied and understood, external factors such as consumer income, personal preference and price or availability of substitute good are inspected and do not consider the analysis. In essence, the demand law provides an insight into the impact of price fluctuations on consumer behavior - at lower prices, products or services are more attractive to consumers because they have more one -off income after buying, while consumers could give up on these purchases because they would have less money.

The formulas of consumers' purchase justify the law of demand. For example, if there is a bearing fruit harvest such as apples and oranges, buyers buy more because high availability of these fruits means that pricesAnd it's cheaper. If the crops are devastated by natural elements such as frost, hurricanes or floods, the price of these goods is higher, because there is less available in food stores and consumers respond to this increase in the price of delaying these fruit or buying other fruits that are in the season. The same idea can also be used for larger purchases such as homes. When the house was often in the open market for a long time in the open market, the demand law dictates that the seller should reduce the price to attract more potential buyers.

There are several reasons for the negative relationship between demand and the price defined by the demand law. First, when the price of the product or service is also increasing, the cost of purchasing this product or service is also increasing. Most consumers are not willing to buy something that will cause them not to buy other items they need, or attach a higher priority when purchasing.

also marginalism affects consumer expenditure. Marginalism, especially toOncept to reduce marginal usefulness, it expresses the theory that over time consumers come from each additional purchase of a particular good or service less satisfaction and eventually decide to buy a contingent only for the price. Finally, if related goods can be purchased for less money, consumers leave products or services with a higher price.