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The Law of Demand :
The law of demand states functional relationship between the price of the product and its demand, and this relationship is inverse in nature. The law states that. "other things being equal, at any given time, the amount demanded increases with a fall in price and diminishes with a rise in price". In other words, according to the law of demand, a rise in the price of a product leads to a fall in its demand and a fall in price leads to a rise in its demand.

Demand Curve:
A demand curve is a locus of points showing various alternative price-quantity combinations. It shows the quantities of a product which the consumers would buy at different prices per unit of time.
Demand Curve:
We draw below an individual demand curve :
In this diagram, along OX we have measured the quantity demanded and along OY the price of the product. With every fall in the price of the product, the quantity demanded increases; DD is the demand curve.

Exceptions to the Law of Demand:
(1) Expectations Regarding Price Variations
When consumers expect a continuous rise in the price of a commodity, they would buy more of it despite increase in its price with a view to avoid the hardship of paying still higher prices in future.

(2) Articles of Prestige Value
There are some goods which are purchased mainly for their 'snob-appeal' or because they have a 'status symbol', that is for enhancing social prestige or displaying wealth and riches. When prices of such goods rise. their 'snob-appeal increases and they are purchased in larger quantities. Things like diamonds, costly jewels, etc. possess prestige value and with every increase in their price, their prestige value also increases.

(3) The Giffen Goods or Inferior Goods
Giffen goods do not mean any specific commodity. It may be any commodity much cheaper than its substitutes, consumed mostly by poorer section of the society as a necessary item; for example coarse cloth, coarse food grains, etc. When the price of such inferior goods falls, consumers do not buy more of it, instead they spend the saved income on some better or superior commodity say like wheat or better quality of cloth. This exception is known as Giffen Paradox, because a fall in the price of inferior goods does not lead to rise in its demand but rather it leads to a fall in demand.

(4) Illusion: Sometimes consumers develop a false notion that a high priced product is of a better quality, and therefore when the price of such a product falls, they are under an illusion that its quality must have deteriorated and therefore they do not buy it.

(5) When the commodity goes out of fashion: When the product demand is being studied goes out of fashion, a fall in it's whose price fails to pick up the demand

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