Apr 23 2012

Law of Demand

Published by at 2:38 pm under

Ceteris paribus, there is an inverse relationship between the price of a good and the quantity demanded by consumers. At higher prices, less of a particular good tends to be demanded, while at lower prices, more of a good tends to be demanded. Can be explained by the income effect, the substitution effect and the law of diminishing marginal utility.

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