#The_Law_of_Demand The Law of Demand is a fundamental principle in economics that describes the relationship between the price of a good and the quantity demanded by consumers. It asserts that, all else being equal, as the price of a good decreases, the quantity demanded increases, and conversely, as the price increases, the quantity demanded decreases. Definition and Explanation The Law of Demand states that there is an inverse relationship between the price of a good and the quantity demanded.