Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 2QP
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Question
- Explain the
law of demand and factors of demand.
Expert Solution
Step 1
In a market, a household enters as a consumer who wanted to purchase various commodities according to their needs, and accordingly, make a demand for those commodities.
Step 2
The Law of demand refers to the economic model that is developed by analyzing the behavior of the consumers in different market situations. It provides information based on the connection between the quantity/output demanded and the price levels of a product ( price level), and according to this law, there is an inverse link between them. For example, increase value (price level) leads to a decrease in output demanded and vice-versa.
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