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The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa.
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Substitution Effect: When the price of one good rises, consumers tend to switch to a similar but cheaper alternative.
Income Effect: Changes in consumer purchasing power due to changes in income levels affect their demand for goods and services.
Law of Supply: The law of supply states that as the price of a good or service increases, the quantity supplied also increases, and vice versa.