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Glossary
Law of Demand

To understand demand, you need to understand buyer behavior. For example, let's consider chocolate bars. Suppose that the price of a chocolate bar is $.80.  At this price, you'll likely buy four bars or more. If the price of a chocolate bar is $1.20, you'll likely buy three bars. But if the price of a chocolate bar is $2.00, you'll likely buy fewer bars—perhaps only one. This behavior is called the law of demand.

Law of Demand

Price per bar Quantity of chocolate bars demanded (bought)

$.80

Chocolate Bars - 4

$1.20

Chocolate Bars - 3

$2.00

Chocolate Bars - 1