In microeconomics, the law of demand is a fundamental principle which states that there is an inverse relationship between price and quantity demanded.

The law of demand states that price and quantity demanded are inversely related, ceteris paribus. This means that as price rises, quantity demanded falls, and as price falls, quantity demanded rises, ceteris paribus. A shortage exists in a market if quantity demanded is greater than quantity supplied.

The law of demand states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded. This occurs because of diminishing marginal utility.

The inverse relationship between price of a commodity and its quantity demanded is explained by law of demand. The Law of Demand states that while other things remaining constant, the quantity of a good demanded increases with a fall in the price and diminishes when the price increases.

The law of supply and demand is a keystone of modern economics. According to this theory, the price of a good is inversely related to the quantity offered. This makes sense for many goods, since the more costly it becomes, less people will be able to afford it and demand will subsequently drop.

An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. For any quantity, consumers now place a higher value on the good,and producers must have a higher price in order to supply the good; therefore, price will increase.

To determine the equilibrium price, do the following.

1. Set quantity demanded equal to quantity supplied:
2. Add 50P to both sides of the equation. You get.
3. Add 100 to both sides of the equation. You get.
4. Divide both sides of the equation by 200. You get P equals $2.00 per box. This is the equilibrium price.