Question

"Petrol is becoming cheaper, yet the demand for cars is not rising."

Does it means that, the law of demand is not operative?

Answer 1

Price of petrol and its impact on the demand for cars has nothing to do with the law of demand. Law of demand studies how the quantity demanded of a commodity responds to changes in the price of the same commodity. Change in the price of petrol would lead to a shift in demand curve for the cars.