The law of demand is a fundamental principle in microeconomics that governs the relationship between the price of a good or service and the quantity demanded by consumers. In a market economy, where price mechanisms coordinate economic activity, the law of demand plays a crucial role in resource allocation, consumer choice, and market equilibrium. This article explores the theoretical basis of the law of demand, its determinants, and its application in real-world market scenarios. By analyzing demand curves, consumer behavior, and the interplay of income and substitution effects, the study emphasizes the law’s significance in market economies.

law of demand, market economy, consumer behavior, price mechanism, demand curve, elasticity, market, country.

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