Answer to Question #309555 in Microeconomics for Fahrul Iqbal

Question

Defi ne carefully what is meant by a demand sched-ule or curve. State the law of downward-sloping demand. Illustrate the law of downward-sloping demand with two cases from your own experience.

Answer 1

The demand schedule depicts the link between a good's market price and the quantity demanded of that good, all other factors being constant.

For example, consider the following demand schedule for a box of cornflakes:

The law of downward-sloping demand states that as a commodity's price is raised (while other factors remain constant), consumers tend to buy less of it. Similarly, when the price is reduced while all other factors remain constant, the quantity demanded rises.

I'll give you two instances from my own personal experience: When a business suddenly cuts the price of food (such as pastries or chocolate) right before the 'best before' date, I will purchase far more than I would ordinarily.

Another example is when the Financial Times offered a cheaper year's subscription online, which I opted to purchase instead of paying full price.