Answer to Question #265756 in Microeconomics for Abeer

Question

In December, the price of Christmas trees rises and the quantity of trees sold also rises. Is this a violation of the law of demand? Why or why not?

Answer with the help of graph

Answer 1

Solution:

No, it is not a violation of the law of demand.

 

The entire concept of a demand curve is predicated on other factors relating to demand remaining constant. In the case of Christmas trees, the consumer's desire to own them is significantly higher in December than in other months. Due to high demand, we expect their prices to go up and since the trees are a necessity for the month of December, consumers will still purchase them despite their price increase.

 

As a result, observing that the market price and quantity of Christmas trees increase in December does not violate the law of demand.

 

This is depicted by the below graph: