There is a big difference between demand and want. Demand can’t be just want. The want, which are backed with purchasing power are called demand. Economics has a different definition about demand. The ability to pay is called demand in economics. Desire also can’t be a demand. For example – a beggar desires to purchase a car, can’t be demand in the word of economics.
Law of Demand:
There is a simple rule of demand, as price increases the demand decreases and as price decreases demand increases. But only price is not factor which affects the demand or supply.
Exceptions of Demand Law:
Giffens Goods – Giffens goods is known by the name of Sir Robert Giffens. On the Giffens goods, law of demand doesn’t work as the price of those goods increases when there is increase in the quantity demanded and when the price decreases there is decrease in the quantity demanded. For example, people will prefer to use meat than potatoes when meat is cheaper than potatoes.
Ignorance effect – According to the law of demand, some people still buys those products which have quality while they are not cheaper.
Status symbol – In these categories, status symbol commodities take place like - jewellery, diamonds etc.
Speculation - Law of demand doesn’t work in the speculation of stock market.
There are some other factors also which affect the law of demand – income, price of related products, taste and preferences.
Income – It is the natural aspect to consume productive products. As income increases, demand increases.
Price of related products – For example – car and petrol are price of related products. As petrol prices decreases, car demand will increase.
Taste and preferences – taste and preferences are also related to each other. It depends on personal consumption and services.
At last, we conclude that all the market whether it is property, real estate or retail all are depended on each other.
Law of Demand:
There is a simple rule of demand, as price increases the demand decreases and as price decreases demand increases. But only price is not factor which affects the demand or supply.
Demand Schedule:
Quantity Demand
Exceptions of Demand Law:
Giffens Goods – Giffens goods is known by the name of Sir Robert Giffens. On the Giffens goods, law of demand doesn’t work as the price of those goods increases when there is increase in the quantity demanded and when the price decreases there is decrease in the quantity demanded. For example, people will prefer to use meat than potatoes when meat is cheaper than potatoes.
Ignorance effect – According to the law of demand, some people still buys those products which have quality while they are not cheaper.
Status symbol – In these categories, status symbol commodities take place like - jewellery, diamonds etc.
Speculation - Law of demand doesn’t work in the speculation of stock market.
There are some other factors also which affect the law of demand – income, price of related products, taste and preferences.
Income – It is the natural aspect to consume productive products. As income increases, demand increases.
Price of related products – For example – car and petrol are price of related products. As petrol prices decreases, car demand will increase.
Taste and preferences – taste and preferences are also related to each other. It depends on personal consumption and services.
At last, we conclude that all the market whether it is property, real estate or retail all are depended on each other.
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