PRINCIPLES OF ECONOMICS: LAW OF DEMAND скачать в хорошем качестве

PRINCIPLES OF ECONOMICS: LAW OF DEMAND

The law of demand is a fundamental concept in economics stating that, all else being equal, as the price of a good or service decreases, the quantity demanded for it increases, and vice versa. This inverse relationship between price and quantity demanded is a cornerstone of consumer behavior. Assumptions of the law of demand include: 1. Ceteris Paribus: It assumes that other factors influencing demand, such as consumer preferences, income, prices of related goods, and external factors, remain constant. 2. Rational Behavior: Consumers are assumed to act rationally, seeking to maximize their satisfaction while considering the price and utility of goods. 3. Continuous Utility: It presumes that the satisfaction or utility derived from consuming additional units diminishes as consumption increases. Limitations of the law of demand involve instances where it might not hold, such as for Giffen goods (where demand increases despite price hikes due to unique circumstances), Veblen goods (luxury goods that experience higher demand with increased prices due to their status symbol), or for goods affected by unpredictable changes in consumer preferences or expectations. Additionally, in markets where income or substitutes change significantly, the law might not accurately predict consumer behavior.