Law of Demand - Inverse Price-Quantity Relationship

Inverse Price-Quantity Relationship - Price and quantity demanded move inversely (ceteris paribus). This fundamental principle, known as the Law of Demand, states that holding all other factors constant ($ceteris\ paribus$), a change in price leads to an opposite change in the quantity consumers are willing and able to buy.

Core statement - When price falls, quantity demanded rises; when price rises, quantity demanded falls. This relationship is driven by consumer behavior, where lower prices increase the affordability and attractiveness of a good, prompting greater purchases, and vice versa.

Mathematical form - The derivative of quantity demanded ($Q<em>d$) with respect to price ($P$) is negative, indicating a downward-sloping demand curve: \frac{dQd}{dP} < 0.

Quick takeaway - Lower price ">" higher quantity demanded; higher price ">" lower quantity demanded. This inverse relationship is crucial for understanding market dynamics and predicting consumer responses to price changes.