{"id":8593,"date":"2021-10-16T19:42:19","date_gmt":"2021-10-16T14:12:19","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=8593"},"modified":"2025-10-09T13:13:57","modified_gmt":"2025-10-09T07:43:57","slug":"assumptions-of-law-of-demand","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/","title":{"rendered":"Assumptions of Law of Demand (7 Points) |  Free Economic Blogs"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dbb76719690\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dbb76719690\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#Assumptions_of_Law_of_Demand\" >Assumptions of Law of Demand<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#Meaning_of_Demand\" >Meaning of Demand<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#Definition_of_Demand\" >Definition of Demand<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#What_is_Law_of_Demand\" >What is Law of Demand?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#Assumptions_of_Law_of_Demand-2\" >Assumptions of Law of Demand<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#1_Constant_level_of_income\" >1) Constant level of income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#2_No_change_in_size_of_population\" >2) No change in size of population<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#3_Prices_of_substitute_goods_remain_constant\" >3) Prices of substitute goods remain constant<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#4_Prices_of_complementary_goods_remain_constant\" >4) Prices of complementary goods remain constant<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#5_No_expectations_about_future_changes_in_prices\" >5) No expectations about future changes in prices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#6_No_change_in_tastes_habits_preferences_fashions_etc\" >6) No change in tastes, habits, preferences, fashions, etc.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/scholarsclasses.com\/blog\/assumptions-of-law-of-demand\/#7_No_change_in_taxation_policy\" >7) No change in taxation policy<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center has-black-color has-text-color\"><span class=\"ez-toc-section\" id=\"Assumptions_of_Law_of_Demand\"><\/span>Assumptions of Law of Demand<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Demand\"><\/span><strong>Meaning of Demand<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>In ordinary language, demand means a desire. Desire means an urge to have something.<\/strong><\/p>\n\n\n\n<p><strong>In Economics, demand means a desire which is backed by a willingness and ability to pay.<br><\/strong>For example, if a person has the desire to purchase a television set but does not have adequate purchasing power then it will be simply a desire and not a demand.<br>Thus, demand is an effective desire. All desires are not <a href=\"https:\/\/www.nios.ac.in\/media\/documents\/SecEcoCour\/English\/Chapter-9.pdf\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.nios.ac.in\/media\/documents\/SecEcoCour\/English\/Chapter-9.pdf\" rel=\"noreferrer noopener\">demand<\/a>.<\/p>\n\n\n\n<p>In short,<br><strong>Demand = Desire + Willingness to Purchase + Ability to Pay.<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Microeconomic Definition | Historical Review of Microeconomics<\/strong><\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Scope Or Nature of Microeconomics<\/strong><\/a><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/features-of-microeconomics\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/features-of-microeconomics\/\" target=\"_blank\" rel=\"noreferrer noopener\">Features of Microeconomics<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/importance-of-microeconomics\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/importance-of-microeconomics\/\" target=\"_blank\" rel=\"noreferrer noopener\">Importance of Microeconomics<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-1024x576.jpg\" alt=\"Assumptions of Law of Demand\" class=\"wp-image-8609 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Assumptions-of-Law-of-Demand.jpg 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption class=\"wp-element-caption\">Assumptions of Law of Demand<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definition_of_Demand\"><\/span><strong>Definition of Demand<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>According to Benham, \u201c<strong>the demand for anything at a given price is the amount of it, which will be bought per unit of time at that price.<\/strong>\u201d<br>Thus, following are the features of demand :<br>1) Demand is a relative concept.<br>2) Demand is essentially expressed with reference to time and price.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Law_of_Demand\"><\/span><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/what-is-law-of-demand\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/what-is-law-of-demand\/\">What is Law of Demand?<\/a><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Assumptions_of_Law_of_Demand-2\"><\/span><strong>Assumptions of Law of Demand<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Constant_level_of_income\"><\/span><strong>1) Constant level of income<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>If the law of demand is to find true operate then, consumers&#8217; income should remain constant. If there is a rise in income, people may demand more at a given price.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_No_change_in_size_of_population\"><\/span><strong>2) No change in size of population<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is assumed that the size of population remains unchanged. Any change in the size and composition of population of a country affects the total demand for the product.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Prices_of_substitute_goods_remain_constant\"><\/span><strong>3) Prices of substitute goods remain constant<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is assumed that the prices of substitutes remain unchanged. Any change in the price of the substitute will affect the demand for the commodity.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Prices_of_complementary_goods_remain_constant\"><\/span><strong>4) Prices of complementary goods remain constant<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is assumed that the prices of complementary goods remain unchanged because a change in the price of one good will affect the demand for the other.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_No_expectations_about_future_changes_in_prices\"><\/span><strong>5) No expectations about future changes in prices<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is assumed that consumers do not expect any further change in price in the near future. If consumers expect a rise in prices in future, they may demand more in the present even at existing high price.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_No_change_in_tastes_habits_preferences_fashions_etc\"><\/span><strong>6) No change in tastes, habits, preferences, fashions, etc.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>It is assumed that consumers&#8217; tastes, habits, preferences, fashions, etc., should remain unchanged. Any change in these factors will lead to a change in demand.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_No_change_in_taxation_policy\"><\/span><strong>7) No change in taxation policy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The taxation policy of the government has a great impact on demand for various goods and services. Therefore, it is assumed that there is no change in the policy of taxation declared by Government.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/exception-of-law-of-demand\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/exception-of-law-of-demand\/\">There are certain exceptions to the law of demand.<\/a><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" target=\"_blank\" rel=\"noreferrer noopener\">Importance of Law of Diminishing Marginal Utility<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\" target=\"_blank\" rel=\"noreferrer noopener\">Utility in Economics ( Concepts of Utility )<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\" target=\"_blank\" rel=\"noreferrer noopener\">Features of Utility<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" target=\"_blank\" rel=\"noreferrer noopener\">Types of Utility<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":8609,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[10,1],"tags":[2186],"class_list":["post-8593","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-blogs","category-misc","tag-assumptions-of-law-of-demand"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/8593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=8593"}],"version-history":[{"count":9,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/8593\/revisions"}],"predecessor-version":[{"id":39643,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/8593\/revisions\/39643"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/8609"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=8593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=8593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=8593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}