Law of Demand is one of the basic laws in economics.Economics is a social science, so the laws should also be taken in that respect.
It expresses the relationship between the quantity demanded and the price.According to Alfred marshall,The amount demanded increases with a fall in price and contracts with a rise in price.This means that the relationship between the price of commodity and its demand is inverse.Other things remaining the same,inverse relationship between demand and price is called the law of demand.
Most of the laws in economics are based on certain assumptions,if the assumptions went wrong,law will not be applicable.
Assumptions of the Law of Demand :
- Consumers income remains constant.
- Consumers taste and fashion do not change.
- Prices of other goods remain unchanged.
- The commodity has no substitutes.
- There exists perfect competition in the market.
These assumptions will be fulfilled only in the short period of time.So,the law is also true for a short period of time.
In simple words, Law of Demand says that, as price of a commodity is increased, demand for that commodity decreases and viceversa.We have many examples for this in our day-to-day life.