The law of demand states that, other things remaining constant, the quantity demanded of a commodity decreases with rise in its price and increase with a fall in its price. So, there is an inverse relationship between price and quantity demanded of a commodity. This is explained with the help of a table and Figure Both demand schedule and following demand curve are showing an inverse relation between price and quantity demanded.
Demand Schedule and Demand Curve showing inverse relation between Price and Quantity Demanded
| Price per unit (Rs.) |
Quantity Demanded |
| 10 |
50 |
| 8 |
60 |
| 6 |
70 |
| 4 |
80 |
| 2 |
90 |
Exceptions to the Law:
The law will not hold under following circumstances:
(i) Goods of conspicuous consumption: In such cases, higher price means more consumption.
(ii) Giffen good: When price of a giffen good falls, its quantity demanded also falls.
(iii) Consumers ignorance: The law breaks down when consumers judge quality of the commodity by its price.
