law of demand analaysis in economics by rituraj patel and members.

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1. Law of Demand Economics Presentatio n Present by- Ritu Raj Jaiswal Richa Chaurasiya Ritishka Shukla Riya Shukla

2. Introduction Economics studies how people make choices. Demand = quantity of a good/service consumers are willing and able to purchase at different prices. The Law of Demand explains the relationship between price and quantity demanded.

3. Law of Demand – Definition Other things remaining the same, the quantity demanded of a good falls when its price rises, and rises when its price falls. Expresses an inverse relationship between price and demand.

4. Law of Demand – Graphical Representation Y-axis: Price X-axis: Quantity demanded Downward sloping demand curve shows inverse relation between price & demand.

5. Assumptions of Law of Demand No change in income of consumer No change in tastes and preferences Prices of related goods remain constant No expectation of future price changes Population remains unchanged

6. Determinants of Demand Key factors influencing demand other than price: 1. Price of the good itself 2. Income of the consumer 3. Prices of related goods (Substitutes & Complements) 4. Tastes and Preferences 5. Expectations of future prices 6. Population and Demographic factors 7. Government policies & taxation 8. Seasonal factors

7. Price of the Good Higher price → Lower demand Lower price → Higher demand Illustrated by movement along demand curve

8. Income of Consumers Normal goods: Higher income → Higher demand Inferior goods: Higher income → Lower demand

9. Prices of Related Goods Substitute goods (Tea & Coffee): if price of tea rises, demand for coffee rises. Complementary goods (Car & Petrol): if price of petrol rises, demand for cars falls.

10. Demand Curve The demand curve is a graphical representation of the Law of Demand. It shows the inverse relationship between price (Y-axis) and quantity demanded (X-axis).

11. Why it Slopes Downward? 1. Law of Diminishing Marginal Utility - As a consumer consumes more units, satisfaction from each additional unit decreases. - They are willing to pay less for extra units. 2. Substitution Effect - When price of a good falls, it becomes cheaper compared to substitutes → people buy more of it. 3. Income Effect - When price falls, consumer’s real income increases → they can buy more. 4. New Buyers Effect - Lower price attracts new consumers into the market.

12. Conclusion Law of Demand = inverse relation between price & demand. Demand influenced by multiple determinants beyond price. Helps businesses, governments, and consumers in decision-making.