Demand

The law of demand states that, holding all other factors constant (ceteris paribus), as the price of a good rises, the quantity demanded falls; and as the price falls, the quantity demanded rises.

In one symbol: price and quantity demanded are inversely related (P↑ → Qd↓, P↓ → Qd↑), ceteris paribus.

Two intuitions behind the law:

• Substitution effect. When the good becomes more expensive, consumers switch to cheaper alternatives. When it becomes cheaper, they switch towards it.
• Income effect. A higher price effectively reduces a consumer's purchasing power (their income buys less of the good), and the lower-price effect is the reverse.

The ceteris paribus condition is essential. If income, tastes, or the price of a related good change at the same time as the good's own price, the simple inverse relationship may not show cleanly. A definition that leaves out "ceteris paribus" or "all else equal" loses a mark.