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State the law of demand? |
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Answer» Law of demand states that other things being equal, there is a negative relation between demand for a commodity and its price. In other words, when price of the commodity increases, demand for it falls and when price of the commodity decreases, demand for it rises, other factors remaining the constant. The law can be explained in the following manner, i.e. “Other things being equal, a fall in price leads to expansion in demand and a rise in price leads to contraction in demand”. |
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