The Law of Demand

It has been found that consumers trend to buy more a goods (service) when its price falls and less it when the source rises.This inverse relationship is described by a demand  curve shown in Figure which is negatively sloped. 

 Demand Curve

The horizontal subornation of such individual demand curves gives us the market demand curve for that particular  good (service) be it food grains, processed food, milk, oils. fats textiles. footwear, cement or transport, entertainment and other services. While the law of demand holds true in general in respect of normal goods, it is often violated in the case of inferior goods like salt, necessities consumed by the poor sections of people such as course grains, cows, cloth. So also is the case with certain luxuries like precious stones, highly priced cars and works of art. Such exception to the law of demand are also explained later in the following section.