LAW OF DEMAND :
Other things remain constant, the price increases the quantity demanded decreases. Accordingly when price decreases quantity demanded of the commodity increases.
Example 1 : Suppose price of the petrol increases quantity demand of petrol decreases and if price of petrol goes down quantity demand of petrol will go up.
Other things remain constant, the price increases the quantity demanded decreases. Accordingly when price decreases quantity demanded of the commodity increases.
Example 1 : Suppose price of the petrol increases quantity demand of petrol decreases and if price of petrol goes down quantity demand of petrol will go up.
Example 2 : Suppose price of magnum ice cream increases, quantity demanded for the ice cream will decrease and the price decreases quantity demanded will increase.
LAW OF SUPPLY :
Other things remain constant, the quantity supplied of a goods increases when the price of the goods increases and vice-a-versa.
Example 1 : Suppose FIFA world cup is going on and T-Shirts with FIFA logo are sold in high prices and quantity supplied of those T-Shirts also rises as compared to normal events.
Example 2 : Suppose natural calamity occurs and consumer purchases all eatable items simultaneously, so the price of eatable items increases and quantity supplied of those products also increases at the same time.
LAW OF DIMINISHING MARGINAL UTILITY :
Law of diminishing marginal utility states that all things remain constant, as consumption rises the marginal utility derived from each additional unit declines.
Example 1 :
If a person consume one chocolate that can satisfy the level of consumption, But if that person consumes second chocolate the satisfaction level decreases as compared to first one.
Example 2 :
If a person consume one pizza that can satisfy them, but if that person consumes second pizza the satisfaction level will decrease.
SUBSTITUTE GOODS WITH EXAMPLE :
Substitute goods are those goods from another industry which provide same benefit to the consumer as the goods consumed by the same firm or industry.
Example 1 :
Person is using L'Oreal shampoo and there is a price increase in that product, so consumer will shift to the substitute product which is Dove and will provide customer the same benefit.
Example 2 :
Pepsi and Coca-Cola are two substitute product, suppose the price of Pepsi goes up consumer will shift to the Coca-Cola.
COMPLEMENTARY GOODS WITH EXAMPLE :
Complementary goods are pair of goods which complements each other or which are inter-related to each other. If the price of one goods increases then ultimately demand for both goods will go down.
Example 1:
Suppose we go to buy computer and we end up buying software also as we need software as a support tool as we cannot use computer without software.
Example 2 :
Whenever we go to buy DVD player, we also have to buy DVD along with that to complement DVD player. Without DVD we cannot use DVD player.
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