Learn about the law of demand and how it affects consumer behavior.

Say's Law states that supply creates its own demand; Keynes’ Law states that demand creates its own supply. Take a look at the AD/AS diagram below. Notice that the short-run aggregate supply, or SRAS, curve is divided into three zones: the Keynesian zone, the neoclassical zone, and the intermediate zone.

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The law of demand is a foundational principle in microeconomics, helping us understand how buyers and sellers interact in the marketplace. The law of demand states that when the price of a product goes up, the quantity demanded will go down – and vice versa.

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