Law of Demand and Supply, Economics

Law of Demand and Supply,
One of the most important areas of study in business economics is the market.  Producers produce for the market where interaction between demand and supply of a product determines its price.
Law of Demand Meaning
Meaning
The terms demand for product denote the quantity of it consumer or a group of consumers  are willing to purchase at a given price at a given time

Definition
1)It repairs a commodity backed by the ability and  willingness to purchase it. 

 2)The measurable concept is always with rel period.  Always with reference to a price and time

Law of Demand
  The demand for a commodity depends on factors.  The most important factor determining demand is the price of the commodity.  There are many other factors that will have an impact on demand. 

Law of Demand  example, the demand for Yuvraj 215, a type of small tractor sold by Mahindra and Mahindra, at a given period of time, will depend on several factors like, or.  
(a) Price of Yuvraj 215 
(b) Price of other similar tractors hesariusnet 
(c) Cost of fuel to run the tractor 
(d) The interest rate farmers have to pay the loan taken on loan to purchase the tractor 
(e) The income level of the  farmers 
(1) The advertising and promotion of the tractor |  (g) The geographical conditions in which the tractor will be used

 If we assume that all factors, except the price of the tractor, remain the same, we can then derive a functional relationship between the demand for the tractor and its price alone.  This relationship is explained with the help of the Law of Demand which was first propounded by Alfreal Marshall.
        The Law of Demand states that other factors being constant (ceteris paribus), price and quantity demanded of any commodity are inversely related to each other.  When the price of a commoditurises the demand commodity will fall. 

 1.  Alfred Marshall (1842 - 1924) was one of the most influential Neo-Class economists.  His book, Principles of Economics (1890) was an important which Marshall brought out the analysis of demand marginal utility consumer's surplus and costs of production.  

The law of demand explain how the consumers choice behaviour changes when there is a change in the price of commodities in market situation if other factors affecting demand for commodities does not change but only the price change then consumers like to buy more of it commodities when the price falls and less of commodity.when its price rises this behaviour of consumer is commonly observed behaviour and law of Demand is based on such observed behaviour

{ The law of Demand and marketing strategy-:when seller announce discount sale and popularized offer like buy 1get 1free they are applying the law of demand to other marketing strategy however it real life situations price is not only dynamic factor they may be changes in the other factor too.like a rival firm may also announced similar discount sale or may product out of fashion and people not buy more evan the discount price this are the real world challenges that firm face overcome the limitations of law of demand such changes to met to effective advertising and promotion of carrying out product innovation along with price variation }

The law of demand, i.  e. the inverse relationship between the price and the quantity demanded of a good, is explained through the demand curve in Fig.3.1
The most basic laws in economic science at the law of provide and therefore the law of demand.  Indeed, almost every economic event or phenomenon is the product of the interaction of these two law of supply and demand explains the interaction between the supply of and demand for a resource, and the effect on its price.
LOW OF DEMAND
in Fig.3ldd caption.1 price is measured vertical axis and quantity demanded on the horizontal axis the line DD is a demand curve it slopes downward from left to right is shown an inverse relationship between the price and quantity demanded

THE LAW OF SUPPLY
'Supply refers to a commodity of quantity that producers or sellers are willing to produce and offer for sale at a particular price', in a given market, at a particular period of time

The three important aspects are Law of Supply.
 • Supply is a desired quantity
 • Supply is always explained with reference to price 
• Time during which it is offered for sale

The law of Supply graphically explain as below.
The most basic laws in economic science at the law of provide and therefore the law of demand.  Indeed, almost every economic event or phenomenon is the product of the interaction of these two law of supply and demand explains the interaction between the supply of and demand for a resource, and the effect on its price.
Law of Supply 
SS Slopes upward from left to right.  It shows the positive relationship between the price of the commodity and its quantity supplied.  As price rises quantity supplied also rises.

Assumptions of the Law of Supply 
• There is no change in the prices of the factors of production.
 • There is no change in the technique of production.  
• There is no change in the goal of the firm.  
• There is no change in the prices of related goods.  • Producers do not expect changes in the price of the commodity in the near future.



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