Answer» Income of consumer should not CHANGE
The law of demand is based on the following assumption or conditions: No change in consumer's income: Consumer's income must REMAIN unchanged because if income increases consumer may buy more even at a higher price invalidating the law of demand. No change in the size and composition of population: The size of population, gender ratio and age composition are assumed to remain constant. As such changes are sure to affect demand. No change in consumer's taste, preference, habits and fashions: If the taste changes then the consumer's preference also will change which will affect demand. When commodities go out of fashion then demand will be low even at a low price. No expectation of future price change: The consumers do not expect any SIGNIFICANT rise or FALL in the future prices. No change in prices of related goods: The law assumes that prices of substitutes and complementary goods remain constant. No change in tax policy of the Government: The level of DIRECT and indirect tax imposed by the government on the income and goods should remain constant.
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