The law of demand is the principle that consumer buy more of a product at a lower price, and less at a higher price. The theory follows that the greater the amount of goods to be sold, the lower the price must be, to find buyers. Simplistic as this theory may seem, the other defining factor in the law of demand is the availability of capital for purchase. Demand is a measure of capital, in that sense, reflecting the actual purchasing intentions and capabilities of a market.
Examples of Law of Demand:
|Industry sales figures indicate an increased purchase of plant and equipment, 5% above the previous quarter. Demand for plant and equipment is therefore said to have increased, relative to the initial baseline figure for purchases.|