MEANING OF DEMAND :-

In ordinary language the word demand means desire . But in economics demand
means desire backed up by the enough money to pay for the good. Only desire can not
be called demand.
There is also functional relationship between price and demand. Second point is that
demand is always per unit of time.

LAW OF DEMAND :- " Other things remaining the same when the price of any
commodity increases its demand falls and when price falls its demand increases."

According to the law of demand there is inverse relationship between demand and
price.
In simple language was can say that when the price of any commodity falls, people are
tempted to purchase more commodities. On the other hand when price of any
commodity rises people demand less quantity.

NOTE : No doubt with the fall in price demand increases but it is not necessary that
demand may also increases according the same ratio.

The functional relationship between demand and price can also be expressed as under
:

qd = F(P)
qd = Quality demanded
F = Function
P = Price of commodity

We can also explain this law by the following schedule and diagram :

DEMAND SCHEDULE :-
The demand schedule of sugar which is purchased in the market at different prices per
unit of time is given below :

Price per Kg Quantity demanded in rupees

in rupees in Kg.
10 1000 Kg

8 2000 Kg

6 3000 Kg
 4 4000 Kg

2 5000 Kg

EXPLANATION : The above schedule shows that a consumer buys 1000 Kg. sugar 10
rupees per Kg. when price falls to two rupees his demand increases up to 5000 Kg. We
can say that if other things remaining the same, a consumer buys more goods at lower
price and less goods at higher prices.

DEMAND CURVE : Demand curve is a graphic representation of the demand schedule.

EXPLANATION : In the demand curve, the price is shown on the vertical and quantity
demand is plotted on the horizontal axies. The curve DD' demand curve slopes down
which shows that price and quantity demanded work in opposite direction.

NEGATIVE SLOPE : Demand curve always moves from left to right and downward.
Because with the fall in price demand increases.

ASSUMPTIONS :-
While explaining the law we have stated that other things remaining the same these
non-price factors are following :

1. CHANGE IN INCOME :-
There should be no change in income otherwise, rise in price will not cause the
reduction in the quantity demanded.

2. CHANGES IN FASHION :-
As the fashion of any commodity changes its demand and price both falls. So the law of
demand can not operate in this case.

3. CHANGE IN TASTE :-
Demand for commodity may change due to changes in tastes. For example, people

develop a taste for milk. The demand for tea will decrease.

4. CHANGE IN WEATHER :-
Some time due to a sudden change of weather, this law cannot operate.

Sometimes it can also happen that the demand curve may slope upward from left to
right. In other words it may have positively inclined curve. For example if people expect
the prices to go up in the near future, they they will purchase more commodities at a
higher prices. Similarly some articles have great demand when their prices rises and
less demand when price falls. Sometimes people may purchase more commodities at a
higher prices due to ignorance.