# Law of Demand

Keeping all other factors that can affect the quantity demanded constant, the quantity demanded of a good decreases when its price increases, and conversely, the quantity demanded of a good increases when its price falls.

## The Law of Demand and the Slope of the Demand Curve

The fact that the demand curve has a negative slope is a consequence of the law of demand. This negative slope means that as the price increases, the quantity demanded decreases, and vice versa. Therefore, the slope of the demand curve indicates how the quantity demanded varies with changes in price. The relationship between price and quantity is negative due to the law of demand.

Calculating the Slope of the Demand Curve

\[ m = \frac{{y_2 - y_1}}{{x_2 - x_1}} \]

Substituting the values from the points:

\[ m = \frac{{30 - 50}}{{500 - 300}} = \frac{{-20}}{{200}} = -0.1 \]

The negative sign in the slope of the demand curve is consistent with the law of demand. We can use the slope of the demand curve to answer the question: How does a change in price affect the quantity demanded? In this case, for an increase of 1 in price, the quantity demanded decreases by 10 units. Conversely, for each decrease of 1 in price, the quantity demanded increases by 10 units.