Law of Demand

Refers to how much (quantity) of a product or service is desired by buyers at a certain period of time. There is a demand for a good or service if it gives pleasure or meets a need.

The Law of Demand states that other things being constant, an increase in the price of a good lowers the quantity demanded of that good, while a decrease in the price of a good raises the quantity demanded of that good. Price and quantity demanded move in opposite directions.

A table that shows the quantity of a good that buyers would purchase at each price.

The graphical representation of the demand schedule.

A. Caused by a change in price B. Caused by non-price factors

A change in the product's price will result to a MOVEMENT ALONG the CURVE, representing a change in quantity demanded.

Any other changes, other than the price of the product, will result to a SHIFT to the DEMAND CURVE (a NEW demand curve will be formed)

represents an increase in aggregate(overall) demand

represents a decrease in aggregate demand

A buyer's income has a positive effect on demand.

When a population increases, it is expected that demand for all kinds of goods and services will also increase. If population is large, the market is also large.

Consumer taste varies with age, gender, situation or need, habit, and weather.

The demand for a good can also be influenced by the prices of related goods

flashlights and batteries, writing pads and pens (an increase in the price of flashlights will result in a decrease on the demand for batteries)

beef and pork, rice and bread (an increase in the price for beef will result in an increase in the demand for pork)

If buyers expect prices of basic commodities to rise, some of them will buy more than what they need at present in order to take advantage of the lower price. Demand is also affected when buyers expect income to rise. Before the actual rise in income, expectation about future income raises present consumption.