Law of Demand states ”If supply is held constant, an increase in demand leads to an increased market price, while a decrease in demand leads to a decreased market price.”
e.g. With increase in demand for Marketing Communication Services, pricies for such services are increasing too.
The law of demand is represented graphically by a downsloping demand curve. As shown in the figure, as and when there is decrease in price which is denoted as P1, P2, P3; there is increase in the demand i.e D1, D2, D3.
Now, this law can prove wrong in some cases like Inferior Goods. Inferior good is a good that decreases in demand when the consumers income rises, unlike normal goods, for which the opposite is observed. So whenever there is considerable decrease in the price of inferior good the demand for it also decreases.
I would like to add more into this in my next post. Till then..Ciao
Durga Sharma
