Android
Zerodha Broker (Free Delivery)

India's No. 1 Broker with Best Software Trade @ Flat Rs 20

Open Instant Account
market update arrow Delhi riots: Student activists released from Tihar jail on bail arrow Venus Remedies wins legal battle against French firm for paracetamol patent arrow Third Covid wave unlikely to affect children much: WHO-AIIMS survey arrow Covid LIVE: Karnataka sees below 6,000 cases in a day; 9,118 in Tamil Nadu arrow IND vs NZ playing 11: BCCI announces India playing 11 for WTC final arrow No plans to reduce SAIL headcount: Pradhan to WB Finance Minister arrow Jet Airways shareholders reject FY19 and FY20 accounts ahead of NCLT ruling arrow Novavax's Covid vaccine 'Covavax' to launch in India by September: Sources arrow AIIMS-Delhi to resume routine inpatient admissions, elective surgeries arrow Domestic air traffic plunges 63% MoM in May due to second wave: DGCA arrow Gautam Adani loses $9 bn in three days in worst wealth rout arrow RBI 'cautiously optimistic' about economic recovery after Covid second wave arrow JPMorgan, Goldman, two other banks hired by Paytm for proposed $3 bn IPO arrow Govt should provide Rs 3-trn stimulus to perk up domestic demand: CII arrow Hawkish US Fed tone hits D-Street; Sensex slips 179 pts; IT stocks shine arrow Not okay with profit-making firms lecturing us on democracy: IT minister arrow US Fed prepping the markets for taper; a correction will be good: Analysts arrow US Fed prepping the markets for taper; a correction will be good: Analysts arrow India rupee at six-week low; bond yields rise after hawkish Fed signal arrow DATA STORY: India adds fewer than 100,000 cases for 10th day straight arrow Antilia bomb scare probe: Ex-Mumbai Police 'encounter specialist' arrested arrow World Coronavirus Dispatch: Beijing pips global hubs with 80% jab rate arrow PNB Housing hits 5% upper circuit after 25% fall from 52-week high arrow Govt extends validity of motor vehicle documents till Sept 30 due to Covid arrow Flipkart, Amazon challenge Karnataka HC's order to restart antitrust probe

Trading and Investment Terminology

Law of Demand

The law of demand works along with the law of supply to clarify how market economies allot assets and decide the prices of goods and services that we observe in ordinary transactions.

 

The law of demand states that quantity bought is inversely related to the price of the good. In other words, when price rises, quantity demanded falls, and when price falls, quantity demanded rises.

 

This happens as the law of diminishing marginal utility is in effect here. The Law Of Diminishing Marginal Utility states that everything else remaining the same, as consumption increases the marginal utility derived from every additional unit decreases.

 

That is, consumers utilize the first units of a good they purchase to fulfil their most critical needs first, and each additional unit of the good is used to fulfil successively lower valued ends that have a diminished utility.

 

There are 2 main exceptions to the law of demand:

 

1. Giffen goods: A Giffen good is a product that is bought by low income workers, and that defies law of demand in economics. When price of a giffen good rises, its demand also rises and when the price of a giffen good falls, its demand also falls. For example: Wheat is a normal good and bajra is a giffen good.

 

2. Luxury Goods: A Luxury or a Veblen good is a product that is bought for its luxury status, and that defies law of demand in economics. When price of a luxury good rises, its demand also rises and when the price of a luxury good falls, its demand also falls. For example: a car is a normal good but vintage cars that go for high prices come under luxury goods.

Latest News हिंदी समाचार
ad