1. Income Remains Constant:
The income of the consumer must remain constant for the law of demand to hold. If there is a change in his income the result may not be in accordance with the Law of demand.
2. Taste, Habits And Fashion Should Not Change:
It is also assumed that taste of the consumer remains unchanged if there is a change in consumer taste along with changes in price the law of demand may not hold.
3. Price Substitute Goods Should Remain Constant:
To hold the law of the demand, it is assumed that, the prices of substitute and complements should remains constant.
4. No Change In Future Expectation:
The consumer’s products expectations regarding the future behavior of the market should not change. If the expectations change, the law of demand may not hold.
5. Weather Should Remain Constant:
During winter season, utility of woolen clothes goes up; even though they might be very expensive its mean that weather should remains constant to fulfilling the law of demand.
6. Population Growth:
If number of consumers is greater, demand for goods and services will increase and is number of consumer is less in number, demand will decrease. So to hold the law of demand population should remain constant.
LAW OF DEMAND Next Post:
EXTENSION AND CONTRACTION OF DEMAND (Change In Quantity Demanded)