Question

The relationship between the quantity of goods requested and the prevailing price level will give birth to the law of demand:

1) Write down the legal statement of the request in question, and explain it.

2) If it is known that cake requests for individual "Picha" are as follows:

Point	Request	Price of Cake
C	35	3
F	20	6

Calculate the function of Picha's individual requests for the cake and provide an explanation!

Answer 1

1)Law of demand

The legal statement of request( demand) states that there is an inverse relationship between price and quantity demanded.

It means,quantity demanded increases with fall in price and quantity demanded decreases with rise in price.

2)Individual Demand function

​​​​​​​Individual demand function refers to the algebraic expression that shows the functional relationship between individual demand for a commodity made by an individual consumer and various determinants ( price)affecting it.

The demand for a commodity is dependent variable while its determinant( price) is independent variable.

Dx=f(Px)

where Dx= demand for good x

Px= price of good X

Qd. P

35. 3

20. 6

Point C depicts that at price $6, the quantity demanded of cake is 20 but with fall in cake's price to $3, quantity demanded increases to 25(F) . It justifies the law of demand.