Law of Demand

While it applies to most things we encounter daily, there are exceptions to the law of demand. Two of them are Veblen goods and Giffen goods. They show a positive relationship between their price and the quantity demanded by

The three reasons or assumptions underlying the law of demand are the income effect, the substitution effect, and diminishing marginal utility. The first two describe how consumers react when the price of a product changes. The income

What's it: The law of demand is a principle in microeconomics, stating a negative relationship between a good's price and its quantity demanded. The quantity demanded increases when the price falls, assuming other factors are