Introduction

The law of demand was introduced by prof. Alfred Marshall. The law explains the practical relation between cost and quantity demanded. In this article, you will discover the Assumptions of the Law of Demand.
Other factors remaining constant, if the price of a commodity increases, demand for it decreases, and when the price of a commodity decreases demand for the commodity increases
Symbolically, the functional relationship between demand and price is displayed as Dx = f (Px)
Where D =    Demand for a commodity
            x  =    Commodity
            =     Function
          Px =     Price of a commodity7 Assumptions of the Law of Demand

Assumptions of the Law of Demand 

The assumptions of the law of demand are as follows:

1. Constant level income

The income of customers should remain constant. If there is any variation in income, demand leads to change even though the price is constant. For example, if income rises people will demand a higher quantity of a commodity even at a higher price.

2. No change in Size of Population

It is believed that the size of the population remains constant. Any change in the size and structure of the population of a nation affects the total demand for the product.

3. Prices of substitute goods remain constant 

It is believed that the pieces of substitutes remain constant. If the price of substitute changes then it will affect the demand for the commodity. that’s why the price of related commodities should remain. constant. 

4. Prices of complementary goods remain Constant 

It is believed that the price of complementary goods remains constant because a change in the price of one goodwill directly affects the demand for the other. 

5. No expectations about future changes in prices

The fifth assumption of the Demand Law is not to expect any future circumstances about a change or fluctuation in the prices of products.
Here, it is considered not to have any expectation of future price change because it will hit the current demand for goods.
For example, if people are suspecting a rise in the future prices of some goods, then the present demand for such goods will also rise and vice-versa

6. No Change in tastes, habits, preferences, fashions, etc.

The taste, choice, habit, fashion, etc., of the consumer, should remain constant. That is, there should not appear a newer choice or change in the desire to try something different.
Here, it is believed that the consumer’s taste, preference, habit, style, so on., should not change because it breaks the functionality or efficacy of the law of demand.

7. No Change in Taxation Policy

Government has a large impact on demand for several goods and services. There should be no change in taxation policy if it changes. it will affect demand. 

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I hope you guys must have known the assumptions of the demand But still, if you see any need in this post, then please give your view in the comment box and help us to improve that deficiency, thanks.


FAQ ON LAW OF DEMAND 

1. Who introduced the law of demand?
Answer: Prof. Alfred Marshall introduced the law of demand.
2. How functional relationship between demand and price is expressed?
Answer: Dx = f(Px
Where D =    Demand for a commodity
            x  =    Commodity
            f  =     Function
          Px =     Price of a commodity
3. How many Assumptions of the law of demand is there?
Answer: There are 7 Assumptions. 

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