Law Of Demand

What Does Law Of Demand Mean?
A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.

Investopedia explains Law Of Demand
This law summarizes the effect price changes have on consumer behavior. For example, a consumer will purchase more pizzas if the price of pizza falls. The opposite is true if the price of pizza increases.

Filed Under: Economics

Related Terms

Demand
Economics
Equilibrium
Macroeconomics
Marginalism
Microeconomics
Supply
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