Law of Demand

The law of demand is an economic principle that states that the quantity of a good or service demanded by consumers will decrease as the price of that good or service increases, ceteris paribus (all other things being equal). In other words, as the price of a good or service goes up, consumers will be less willing to purchase it, and as the price goes down, they will be more willing to purchase it. This principle is a key component of the market economy and helps to determine the price and quantity of goods and services that are produced and consumed.

For example, if the price of a cup of coffee goes up, consumers may choose to drink tea instead, or may decide to make coffee at home instead of buying it at a coffee shop. Similarly, if the price of gasoline increases, people may choose to drive less, carpool, or use public transportation instead.

The law of demand is often graphed as a downward sloping demand curve, which shows the relationship between the price of a good or service and the quantity demanded by consumers. As the price of the good or service increases along the horizontal axis, the quantity demanded decreases along the vertical axis. This graph can be useful for predicting how changes in price will affect consumer behavior and overall demand for a product.

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