Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

What is Law of Demand?

Law of demand means that the increase in the price of the product decreases its demand in the market.  People will purchase the product more when they see that the price is getting down. This schedule of demand helps in knowing what quantity a customer is going to purchase and at what price. Generally, the demanded number of a commodity is contrary to its price.

Conjecture below which law of demand is well grounded

The law of demand will appropriate solely when the facts mentioned below are satisfied.

●     If there is no alteration in the income of an individual user.

●     The size of the population remains the same.

●     The price of interconnected commodities does not change.

●     No compromise in the customs, fashion, preference and taste of the customer.

●     There should be no assumptions concerning the future alteration in the price.

You can simply understand the law of demand by two methods one is by the demand curve and other with the help of the demand schedule here we will be discussing how to understand law of demand with the help of the demand scheduler.

Demand Schedule is basically a way to represent the price and the quantity demanded in a form of table. You can represent the quantity of the product and the different combination of the price that is demanded by the customer within the specific period of time. As the price of the product decreases the consumption increases. Therefore, we can say that there is always a negative relationship between the price and quantity demanded for a commodity.

Shortcoming/Inconsistency of law of demand

There are various irregularities and the fallibility of the law of demand discussed below:

Basic necessities
The law of demand is not valid to the basic necessities of life like sugar, milk, salt etc. these are the things that we use daily and these kinds of goods does not alter with the fall or the rise in price.

Inferior goods or Giffen goods

Predominantly the Giffen goods are the goods that are cheaper in price and as the price of these product increases consumption decreases which is almost against the law of demand. This shows that there is an indirect relationship in the price and quantity that is demanded.

You can simply understand the law of demand by two methods one is by the demand curve and other with the help of the demand schedule here we will be discussing how to understand law of demand with the help of the demand scheduler

Prestige valued goods

Some goods are so expensive that a common man cannot afford it and one example of such goods is diamonds. It is a product that only rich people can afford. The higher the price, higher is the prestige value. In such cases people prefer to buy less amount of diamond because when the price falls its prestige value also becomes less and when the price increases the prestige value increases and it results in demand in the quantity.

Change in the fashion

If the product is out of fashion, then law of demand will not be valid for this as this is very obvious that when a product is out of fashion you do not want to buy it even at the low prices.

Price assumption

The assumption of price is against the law of demand, when people assume that the price of the product is going to fall in the coming days then they do not buy the product and wait for the price to fall so that they can afford large quantity in lesser amount. On the contrary if they assume the price to be higher in the future they buy the commodity in the price they are getting now.