5
Law Of Demand
2. Law of Demand
It states that people will buy more of a product at a lower price
than at a higher price, if nothing changes.
It states that at a lower price, more people can afford to buy more
goods and more of an item more frequently, than they can at a
higher price.
It states that at lower prices, people tend to buy some goods as a
substitute for others more expensive.
3. Demand Curve
A demand curve is a graphical or mathematical diagram that shows
the relationship between the price and quantity of a product that
consumers are willing to buy. In business, demand curves are useful
when testing and measuring thesupply and demandof certain products
within a competitive market. Graphed over time, demand curves
assist businesses in determining if a certain product is actually
profitable at the pricing point on the curve where it is in
demand.
4. Graphing a demand curve begins with two perpendicular lines
forming a right angle. The y-axis, or vertical line, represents
price as the dependent variable, and the x-axis, or horizontal
line, represents the quantity demanded as theindependent variable.
Price increments move up along the outside of the y-axis with the
highest price nearest the top.
5. Demand Curve
