Law of Demand 

The law of demand shows the relationship between of a commodity and it's quantity demanded. This law states that," There is inverse relationship between price of a commodity and its quantity demanded, others things remaining the same." It means that the quantity demanded for a commodity increases with the fall in price and decreases with the rise in price.

The law of demand can be explained by the following demand schedule :

In the above table when the price of a commodity is Rs. 1, the quantity demanded for that commodity is 50 units initially . When the price of the commodity increases from Rs. 1 to 2, RS. 2 to 3, RS. 3 to 4 and RS. 4 to 5, the quantity demanded for that commodity decreases from 50 units to 40 units, 40 units to 30 units, 30 to 20 units, and 20 to 10 units respectively.

This table shows that there is inverse relationship between the price of the commodity and its quantity demanded.

This table can be presented in the following figure :

In the above figure, price of the commodity and its quantity demand are measured along Y axis and X axis respectively. The downward sloping DD curve, represents the demand curve which shows the various quantity demanded at different price. There is inverse relationship between price of the commodity & it's quantity demanded.

Chapter 2 Part 4