Define: Law of Demand
states that when market situations remain constant and when prices fall the quantity demanded of a good increases and if the price increases or never falls then the demand for a good falls. The law also states that demand for goods will also fall or rise due to a variety of consumer attitude and monetary factors to include:
- Change in consumer taste or fashion
- Change in general consumer income
- Inflation or deflation of economy
- Introduction of or anticipation of new technology
When mapped out on a chart or graph the demand curve shows how the quantity demanded of any given product during a specified period of time will change as prices of a product changes. The position of a demand curve is also determined by the price of related products, the number of potential buyers, and are the factors regarded as fixed when a demand curve is plotted. A change in any of these factors will cause a shift of the demand curve and sales.