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Law of demand

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Goods satisfying the law of demand are termed [[ordinary good]]s. Examples of goods that (appear to) fail the law of demand are [[Veblen good]]s and [[Giffen good]]s.
 
==Levels of operation of the law==
 
The law of demand operates at multiple levels.
 
* ''For a given household and a given commodity'': The demand of a particular household for a particular commodity is expected to increase, or at least stay constant, as the price of the commodity falls. This relies on the crucial assumption that the marginal benefit from every additional unit of the commodity is decreasing. {{further|[[Law of demand for individual buyers follows from diminishing marginal benefit]]}}
* ''For an aggregate of households and a given commodity'': The demand over an aggregate of households for a particular commodity is expected to increase, or at least stay constant, as the price of the commodity falls. This may happen because the consumption of individual households increases steadily, as well as because the number of households purchasing the commodity also increases steadily, as the price falls to the reservation price. The second effect is due to differences in [[reservation price]]s across households. Note that this effect is operational even when there is essentially no scope for a single individual or household to buy more than one unit of the commodity. {{further|[[Law of demand for multiple buyers following from differences in reservation prices]]}}
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