The law of demand is basically a law that implies the reverse relationship between the demand of a product and its price. It states that as the prices rises, the demand decreases and vice versa.
The following are the exceptions to this law:
- Bandwagon effect
- The desire to be out of the ordinary
- Individual perceptions
- The need for differentiation
- Snob effect
Law opf demand states that ,""Otherthings being constant ,whan price of a product falls quantity demand rise and when price of prodeuct rise quantity demand of a product falls.""
The execption of law of demand are
Law of demand says that when the price of a good or service rise , demand for that good or service falls and when price of a good or service falls its demand rises.its mean there is inversely or negative relation between price and demand. exceptions:1. Test and fashion of consumer will not change.2. Income of the consumer will not change.3.prices of other substitutes of that good or service will not change.3, there will no discovery of substitutes of that good or service.
Oskar Morgensdern in his article demand theory reconsidered has discussed the indivisibly and desire of conspicuous and different consumption style. He says that such possibilities have contracted the traditional demand curve the same like situation has been presented by Harvey Levin stein in his article Bandwagon snob and Veblen effects in the theory of consumer demand.
The consumers have the desire to purchase those goods to consumer, those goods, to follow such a pattern of life which they related and friends are following. People have craze to follow stylish way of life to boyish and look like young person. In such situations whatsoever is the influence on demand is given the name of Bandwagon effects.
The consumers have the desire that they should not use those goods which are used by ordinary persons.
So that they could differentiate themselves from others or they could pass a distinctive standard of living. Such effects on demand are called Snob effects.
These situations concerned with conspicuous and different consumptions. So many consumers purchase goods just because its price is high. In other words the same consumers who are prestige minded and purchase those goods which have the effect of increase heir dignity of show.
Substitutes go against the law of demand. As the price of product 'a' increases, demand for product 'b' will increase as well. Product 'b' being a substitute for product 'a' those who previously demanded product 'a', will now switch to demanding product 'b' as a less expensive alternative- a substitute.
There are 3 exception.
1.giffen goods(sir robert giffen) -
basically means that the D curve goes perverse at p1 ,as price increases so does demand. (discovered during the famine-look up in google)(diagram )
3. Goods which are affected by expectations of future price rise- (diagram
Law of demand:
if price of a product increases quantity demanded alse increases and vice versa.
Demand curve is downward sloping .
Law of supply:
If price of a product increases quantity supplied also increases and vice versa.
Supply curve is downward sloping .
The Laws Of Demand :the increase of price ,the decrease of quantity, nothing hanppen in enconmic.