Question

Explain the law of demand to a recent purchase that you have had to make.

Answer 1

Recent purchase: Bed Cover

Law of demand:

As the price of a product decreases, the quantity demanded of that product increases; and vice versa. Therefore, the law suggests that there is an inverse relationship between these two – price and quantity.

Explanation:

Actually I wanted two bed covers within the maximum budget of $45. I visited the first shop and got the price as $29 each, and in the second shop it is $21 each. Suppose there are no other shops in the market; therefore, there are no other alternative. If the 1^st shop is chosen, it is exceeding the budget (2 × $29 = $58 > $45). I have chosen the 2^nd shop, since the price is lower – as the price is low, I am able to purchase 2 bed covers instead of 1 and can able to satisfy my budget (2 × $21 = $42 < $45).

Therefore, the inverse relationship exists here.