Benchmarks
Nifty22,462.00135.1
Precious Metal
Gold (MCX) (Rs/10g.)68,459.00782.0
| 02 April, 2024, 04:09 AM IST | Today's ePaper
Subscribe
Sign In
New Financial Year Offer
Business News›Definitions›Economy›Law Of Demand
Categories
Suggest a new Definition
Proposed definitions will be considered for inclusion in the Economictimes.com
Economy
- PREV DEFINITION
Labour Market
A labour market is the place where workers and employees interact with each other.
Read More
- NEXT DEFINITION
Law of diminishing utility
Read More
(##include msid=4006719,type=11 ##)
Definition: The law of demand states that other factors being constant (cetris peribus), price and quantity demand of any good and service are inversely related to each other. When the price of a product increases, the demand for the same product will fall.
Description: Law of demand explains consumer choice behavior when the price changes. In the market, assuming other factors affecting demand being constant, when the price of a good rises, it leads to a fall in the demand of that good. This is the natural consumer choice behavior. This happens because a consumer hesitates to spend more for the good with the fear of going out of cash.
The above diagram shows the demand curve which is downward sloping. Clearly when the price of the commodity increases from price p3 to p2, then its quantity demand comes down from Q3 to Q2 and then to Q3 and vice versa.
Learn more about the Law of Demand..
Read More News on
- PREV DEFINITION
Labour Market
A labour market is the place where workers and employees interact with each other.
Read More
- NEXT DEFINITION
Law of diminishing utility
Read More
Related Definitions
- Asset Turnover RatioAsset turnover ratio is the ratio between the value of a company’s sales or revenues and the value of its assets. It is an indicator of the efficiency with which a company is deploying its assets to produce the revenue. Thus, asset turnover ratio can be a determinant of a company’s performance. The higher the ratio, the better is the company’s performance. Asset turnover ratio can be different froAusterity economic growth of country is determined by factors such as Capital structure, Human resources, Natural resources and revenue generation of businesses operating within the nation. A decline in the economic development can impact all the four factors of a government system. One of the main contributors of decline in the economic system is debts. A country borrows money from creditors, with the vieBailoutBailout is a general term for extending financial support to a company or a country facing a potential bankruptcy threat. It can take the form of loans, cash, bonds, or stock purchases. A bailout may or may not require reimbursem*nt and is often accompanied by greater government oversee and regulations.The reason for bailout is to support an industry that may be affecting millions of people inBalance Of PaymentAccording to the RBI, balance of payment is a statistical statement that shows1. The transaction in goods, services and income between an economy and the rest of the world,2. Changes of ownership and other changes in that economy’s monetary gold, special drawing rights (SDRs), and financial claims on and liabilities to the rest of the world, and3. Unrequited transfers.Description: The tran
- Bank RateBank rate is the rate charged by the central bank for lending funds to commercial banks. Description: Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks. In order to curb liquidity, the central bank can resort to raising the bank rate and vice versa.Also See: Base Rate, Call Money RateBarter the hard currency came into existence, the most common form of trade was bartering. Barter Systemdates back to the old time when there was no money. The only way to buy goods was to exchange them with personal belongings of similar value. For example- A farmer gives his cattle in exchange for some land, and so on. In simple words, any exchange of goods and services for other goods and services wiBase RateBase rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers. Description: Base rate is decided in order to enhance transparency in the credit market and ensure that banks pass on the lower cost of fund to their customers. Loan pricing will be done by adding base rate and a suitable spread depending on the credit risk premium.AlsBasel IiiThe third Basel accord or Basel-III is the cornerstone of banking supervision in the world. Framed by a committee of elite central bankers, the accord provides the guidelines for prudent supervision of banks all over the world and sets the standard for such supervision.Description: Basel-III is third in the series of accords following Basel-I and Basel-II. It was released in December, 2010, in
- BrexitIt is an abbreviation for the term “British exit”, similar to “Grexit” that was used for many years to refer to the possibility of Greece leaving the Eurozone. Brexit refers to the possibility of Britain withdrawing from the European Union (EU). The country will hold a referendum on its EU membership on June 23.Description: Why the Call for Referendum?When David Cameron became the prime miBrics the BRICS?BRICS is an acronym that started as BRIC in 2001, coined by Jim O’Neill (a Goldman Sachs economist) for Brazil, China, India, and Russia. Later in 2010, South Africa was added to become BRICS. Goldman Sachs claimed that the global economy will be dominated by the four BRIC economies by 2050. The main reason for such a claim was that China, India, Brazil, Russia, and South Africa were ra
Related News
- Lok Sabha passes demands for grants for 2024-25During the Parliament Budget Session, the Lok Sabha approved the 'Demands for Grants on Account for 2024-25.' Additionally, the Lower House of Parliament passed the second and final batch of supplementary demands for grants for 2023-24. On Monday, the government requested parliamentary approval for an additional net expenditure of Rs 78,673 crore in the second and final batch of supplementary demands for grants for 2023-24.
- Government: Could not pursue Gopal Subramanium's case as he himself 'withdrew'Govt tonight said the case of Gopal Subramanium for appointment as a SC judge wasn't taken forward as he himself "withdrew" his candidature.
- Government says it could not pursue Gopal Subramanium's case as he himself 'withdrew'Government said Gopal Subramanium's case for appointment as a SC judge was not taken forward as the noted lawyer himself "withdrew" his candidature.
Trending DefinitionsRBI MPC Meet LiveBudget 2024 Real EstateRailways Budget 2024Interim Budget 2024Budget 2024 New Tax RegimeIncome Tax in Budget 2024Debt fundsRepo rateMutual fundGross domestic productData miningAdvertisingProductMonopolyCryptographyDepreciation