A point on the demanded curve shows the quantity demanded at a given price. So a movement along the demanded curve shows a change in the quantity demanded. The entire demand curve shows demand.
If the price of a good change but every thing else remaining the same there is a movement along the demand curve. Because the demand curves slope downward a fall in the price of good increases the quantity demanded of it.
A shift of the demand curve shows a change in demand. If the price of a good remaining constant but some other influence on buyers plans changes, there is a change in demand for that good. We illustrate a change in demanded as a shift of the demand curve.
The law of demand simply expresses the relation between quantity of a commodity demanded and its price. The law states the demand varies inversely with price, if the price falls. Demand will extend and if the price rises, demand will decline. The law of demand indicates this inverse relationship between price and quantity demand.
The law can also be stated thus,’’ a rise in the price of a commodity or service is followed by a reduction in demand and a fall in price is followed by an increase in demand, if conditions of demand remain constant.
The qualitying phrase ‘the conditions of demand remaining constant ‘’ is very important. Demand is subject to several influences, which will be discussed presently and the operation of any of those influences may counteract the law.
In Marshall’s words “The greater the amount to be sold the smaller must be the price at which it is offered in order that it may find purchases, or in other words the amount demand increases with a fall in price and diminishes with a rise in price. Demand thus is a function of price varies with price & can be expressed as D = F (P).
Here, D is demand and
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