Explain the law of demand. What does it imply about the shape of the demand curve?...

Explain the law of demand. What does it imply about the shape of the demand curve? What relationship is shown by a demand curve?

Expert Solution

If we talk in simple terms then law of demand says that when other things are held constant or in cetris paribus price and quantity demanded are inversely related
which means if price increases then quantity demanded will decrease in and vice versa
it is shown on the demand curve where Y axis represents the price and X axis represents the quantity demanded
both shows inverse relationship due to which the the curve is also called inversely slope or downward slope in nature
the relationship between them is shown on a demand curve between the price and quantity demanded
the demand is generally of three types that are elastic demand ,inelastic demand and unit elastic demand

An elastic demand is that type of demand in which even there is a small change in price can causes heavy change in the quantity demanded

opposite to it is inelastic demand

in case of unit elastic demand the proportion increase of price is same as the proportion increase in the quantity demanded

Rahul Sunny answered 7 months ago

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