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State And Explain Law Of Demand With Assumptions
State And Explain Law Of Demand With Assumptions
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Solution
Law of Demand
According to Marshall, the law of demand is defined as “Other things being equal, the quantity of a commodity demanded varies inversely with its price.”
Law of demand can be expressed as D_{x} = f (P_{x})
Where,
D = demand for commodity X
X = commodity demanded
F = function of
Px = price of the commodity X
Assumptions to the law of Demand
- There will be no introduction of any substitutes
- There will be no change in prices of substitute goods
- There will be no anticipation of price change in future
- There will be no change in the income level of the consumer
- There will be no change in the taxation policy of the government
- There will be no change in consumer’s taste, preference and habit
- There will be no change in size, sex and age composition of the population
Explore more such questions and answers at BYJU’S.
Law of Demand
According to Marshall, the law of demand is defined as “Other things being equal, the quantity of a commodity demanded varies inversely with its price.”
Law of demand can be expressed as D_{x} = f (P_{x})
Where,
D = demand for commodity X
X = commodity demanded
F = function of
Px = price of the commodity X
Assumptions to the law of Demand
- There will be no introduction of any substitutes
- There will be no change in prices of substitute goods
- There will be no anticipation of price change in future
- There will be no change in the income level of the consumer
- There will be no change in the taxation policy of the government
- There will be no change in consumer’s taste, preference and habit
- There will be no change in size, sex and age composition of the population
Explore more such questions and answers at BYJU’S.
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