Law of Demand
The law of demand states that, all other things being equal, the quantity demanded of a good or service is inversely related to its price. In other words, the higher the price of a good or service, the lower the quantity demanded, and vice versa. This law is one of the most fundamental principles of economics and is based on the observation that people will generally buy more of a good or service when its price is lower and less when its price is higher.
History of the Law of Demand
The law of demand was first proposed by English economist William Stanley Jevons in his 1871 book, The Theory of Political Economy. Jevons argued that the demand for a good or service is determined by its price, and that the quantity demanded will decrease as the price increases. This law has since become one of the most widely accepted principles of economics.
Comparison of Price and Quantity Demanded
| Price | Quantity Demanded |
|---|---|
| $10 | 100 units |
| $20 | 50 units |
| $30 | 25 units |
Summary
The law of demand states that, all other things being equal, the quantity demanded of a good or service is inversely related to its price. This law is one of the most fundamental principles of economics and is based on the observation that people will generally buy more of a good or service when its price is lower and less when its price is higher. For more information about the law of demand, you can visit websites such as Investopedia, The Balance, and Khan Academy.
See Also
- Law of Supply
- Elasticity of Demand
- Inelastic Demand
- Price Elasticity of Demand
- Substitute Goods
- Complementary Goods
- Marginal Utility
- Consumer Surplus
- Producer Surplus
- Opportunity Cost
