Essay on Law Of Demand : The Price Of A Good And The Demand For It

842 Words Oct 19th, 2016 4 Pages
1.The Law of Demand: states that there is a direct relationship between the price of a good and the demand for it. In particular, people generally buy more of a good when the price is low and less of it when the price is high. This is a general rule that applies to most goods called normal goods. As the price of a normal good increases, people buy less of it because they are usually able to switch to cheaper goods.
The change in quantity demanded is caused by a change in price. As the price of a good increases, the quantity demanded will decrease. A change in demand will result in a shift of the demand curve and is different than a change in quantity demanded. For example, Microsoft Xbox and Sony PlayStation. If the price of Xbox rises, you will want to purchase less of them. However, if the price of PlayStation remains constant, people will simply purchase PlayStation instead of Xbox, your quantity demanded for Xbox will decrease and the quantity demanded for PlayStation will increase.

2.A Change in demand will result in a shift of the demand curve and is different than a change in quantity demanded. For example, this can be caused when consumers realize playing games is not healthy and reduce the amount of video games. This will cause a decrease in demand for PlayStation and Xbox

Shift in Demand-
The position of the demand curve will shift to the left or right following a change in an determinant of demand. Increases in demand are shown by a shift to the right in the…

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