The main characteristics of the Law of Demand are the following:
(i) Inverse Relationship : There is an inverse relationship between the price and quantity of demand, that is, if the price increases, the demand falls, and if the price falls, the demand increases.
(ii) The Demand is a Dependent Variable : Under the law of demand, the price is an independent variable and demand is a dependent variable. Thus, it is the effect of price on demand which is examined, and not the effect of demand on price.
(iii) Other Things Remain the Same : The law of demand assumes that the other things remain the same. In other words, there should be no change in other factors affecting the demand except the price. If, however, any other or more one other factors, say the income, alternative price, consumer taste and preferences, advertising outlets, etc. change, despite the increase in their price, demand may increase or alternatively decrease in demand may be seen in spite of price decline.
