Mathematical Expression
The negative relation (i.e., higher price attracts lower demand & lower prices encourages high quantity to be bought by the consumers) is based on logic and experience. Mathematically, the inverse relation may be stated with causal relation as:
Where, is the quantity demanded of x goods
is the function of independent variables contained within the parenthesis, and
is the price of x goods.
Hence, in the above model, the function is a varying one i.e., the law of demand postulates as the causal factor (independent variable) and is the dependent variable.
Two variables move in the opposite direction. When falls rises and the reverse. In regard to the question "by how much will quantity demanded rise?", the law is silent. For example, when for a rail ticket falls from $111 to $105, ridership may rise from 1625 daily riders to 1825 daily riders or even to just 1626 daily riders. Thus the law of demand merely states the direction in which quantity demanded changes for a given change in price. Moreover, what the law states is hypothetical and not actual.
Read more about this topic: Law Of Demand
Famous quotes containing the words mathematical and/or expression:
“It is by a mathematical point only that we are wise, as the sailor or the fugitive slave keeps the polestar in his eye; but that is sufficient guidance for all our life. We may not arrive at our port within a calculable period, but we would preserve the true course.”
—Henry David Thoreau (1817–1862)
“Every production of an artist should be the expression of an adventure of his soul.”
—W. Somerset Maugham (1874–1965)