The low of demand stats that, there is a negatively relationship between the price of goods and the demand supplied cateris paribus. Explain the meaning of the statement and give practical examples
The law of demand states that, all other factors being equal, as the price of a good or service increases, the quantity demanded decreases. In other words, there is an inverse relationship between the price and the quantity demanded.
For example, if the price of a popular brand of clothing increases, consumers may choose to purchase a cheaper alternative or reduce the quantity they buy. Similarly, if the price of gas increases, consumers may drive less or look for alternative modes of transportation.
Conversely, when the price of a good or service decreases, the quantity demanded tends to increase. For instance, if a restaurant offers a discount on a particular meal, more customers may choose to dine there. Likewise, if the price of smartphones decreases, more people may be inclined to purchase one.
Overall, the law of demand reflects the basic economic principle of scarcity and consumer behavior. It underscores the idea that as the price of a good or service changes, consumers will adjust their purchasing decisions accordingly.