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Law of Demand Calculator

Formula

To calculate the quantity demanded based on the Law of Demand:

$QD = a - (b \cdot P)$

Where:

$QD$ is the quantity demanded
$P$ is the price of the good or service
$a$ is the quantity demanded when the price is zero
$b$ is the slope of the demand curve

What is the Law of Demand?

The Law of Demand is an economic principle that describes the inverse relationship between the price of a good or service and the quantity demanded by consumers. It states that as the price of a good or service increases, consumer demand for it decreases, and vice versa, assuming all other factors remain constant. This law illustrates the consumer behavior of purchasing less of a product when its price rises, and more when its price falls.

Example Calculation

Let's assume the following values:

Price of the Good or Service $P$ = $10
Quantity Demanded when Price is Zero $a$ = 100 units
Slope of the Demand Curve $b$ = 2

Step 1: Calculate the quantity demanded:

$QD = 100 - (2 \cdot 10) = 100 - 20 = 80 \text{ units}$

So, the quantity demanded is 80 units.