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Hypothesis: As we all come across the word “Demand” (a simple word but with multitude usage in practice), the foundational concept to understand what the economics is? And how it functions? With due importance of it, one can easily understand the behavior of commodities’ against its prices (termed as Law of Demand) subject to its assumptions. There are certain circumstances where this law loses its validity due to one or the other reasons Viz.., Veblen’s effect, Giffen paradox 1 etc.., In continuation to these exceptions this article is an attempt to check whether the state of the economy (especially recession) acts as an exceptional factor in determining the goods’/commodities’ demand or not, by considering different sectors for different time periods 2. The outputs were surprising because some sectors/businesses were benefitted due to this pandemic led recession and some faced challenge for its survival and revival. However the article is based on secondary data 3 obtained from their competing agency/authority in which the credibility and credit follows them.

This paper points out as the only social science that is axiomatic, economics has the power of predicting beyond interpreting. It then explains that in hypothesis testing, the law of demand is the only indispensable axiom in economics, and that quantity demanded is the only non-observable variable that must be retained. After reviewing his disagreements with his peers and colleagues, and his success in predicting the transformation of China, the author argues that the profession has gone astray with the surge in the use of non-observables.

Purpose: the article is devoted to modeling the market interaction of supply and demand in the dynamics of three-dimensional space on the bourse market in conditions of turbulence using classical economic theories of General utility, product value and total costs. Discussion: turning to the theory of value, as a necessary scientific direction that complements the marginal theory of utility, is associated with the intensive manifestation of turbulence in the behavior of prices on the modern bourses in 2020, observed since the end of the 80s of the last century, which characterizes the unpredictable behavior of prices on modern stock markets. Initially, the most tangible peak was reached at 19 of October 1987 which erupted in the global stock market crisis. This crisis led to the ruin of more than 90% of actively working traders in the stock markets. In the future and up to the present time, the world exchange trade, as we know, is constantly «feverish» financial and other shocks and instability. In fact, the main reason for developing bourses crises, which, unfortunately, are becoming more and more periodic and stable, is the natural increase in the speed of exchange such as the «purchase and sale» of shares or other similar derivatives. The turbulence (bourse altitude) activity, in the same of the time, reduce more and more times that that traders-brokers are forced to abandon the previously traditionally established order of sequential change of procedures for «buying and selling» and are forced to simultaneously act both as sellers and as buyers, at the same time. And then, fearing to lose a significant portion of their profits and incur imminent ruin, most traders or brokers began to delay the sale of relatively significant volumes of shares. At the same time, the presence of a reduced number of shares or other derivatives in the exchange trading turnover of the market should lead to a market deficit of shares and therefore to an increase in demand for them (which, according to the law of demand, is the natural tendency of the market to increase prices). But such price increases, from the point of view of the natural behavior of the market, we will have to see in the future, as the contrafact market. Therefore, we will have the change of the turbulence markets prices (volatility solution), in way of, more also prices solutions as the «bourse challenge» up to the negative solutions. The last solutions, as we see, to way out us to the crisis challenge solutions in all, and to the bad crisis activity on the bourse turbulence market (we mean here, on the bourse trade square: trading against bear also follow to the bear trade solutions). Result: we have the create solutions way of the strategy, also the reduce solutions on the bourse trade square, also the positive market solutions (we mean here, the positive bourse market solutions, with also the positive bourse market future solutions). We mean here, the basis of the space and time condition, way with the open the first reduce of the wave the bourse price oscillations, that follow after the little long oscillations of price on the bourse turbulence market (on the trade square, on the bourse square market).

Activity rules—constraints that limit bidding in future rounds based on past bids—are intended to limit strategic bidding delays in high‐stakes auctions. This article provides a general treatment of activity rules. Traditional point‐based rules are effective for homogeneous goods and reasonably suited for substitute goods. However, they are simultaneously too strong and too weak for general environments; they allow parking, while sometimes preventing straightforward bidding. We prove that the activity rule operationalizing the generalized axiom of revealed preference (GARP) is essentially the unique rule that enforces the Law of Demand while enabling straightforward bidding and never producing “dead ends.”

Karl-Friedrich Israel (2018) sees “obvious tension” in a book chapter (Salerno 2018) in which I argue that the Hicksian income effect plays no role in the causal-realist approach to the demand curve. Israel’s reconstructed “wealth effect” is an effort to solve this perceived problem. This comment addresses the expositional gap in my analysis, and resolves the perceived tension. I then outline the problems with Israel’s proposed solution, which involves a wholesale reconstruction of demand theory that, in the end, implies a denial of the law of demand.

We offer a rationalization of the weak axiom of revealed preference (WARP) and of the weak generalized axiom of revealed preference (WGARP) for both finite and infinite data sets of consumer choice. We call it maximin rationalization, in which each pairwise choice is associated with a local utility function. We develop its associated revealed-preference theory. We show that preference recoverability and welfare analysis à la Varian (1982) may not be informative enough when the weak axiom holds but when consumers are not utility maximizers. In addition, we show that counterfactual analysis may fail with WGARP/WARP. We clarify the reasons for these failures and provide new informative bounds for the consumer's true preferences, as well as a new way to perform counterfactual analysis. Finally, by adding the Gorman form and quasilinearity restrictions to the "local" utility functions, we obtain new characterizations of the choices of the Shafer (1974) nontransitive consumer and those choices satisfying the law of demand.

The study focuses on the demand-price relationship in the commodity market and the scope of the demand curve when the assumptions of ceteris paribus and rationality are relaxed. The study gives some useful insights to the policy-makers to consider while framing any policy related to aggregate demand, output, or inflation. The study is divided into five sections. The first section presents views of different schools of economists. The second section presents a review of the literature on the existing works by distinguished authors. It is covered under three themes: arguments in favor of the downward-sloping demand curve; factors other than price that influence quantity demanded; and circumstances where the demand curve is not downward-sloping. Section three covers the research methodology undertaken to analyze the emergence of the concept of demand and the factors directing it. Coupled with it, are the tentative explanations highlighting the main objectives; access to data and resources helpful for the research; the applied methods for concrete results that includes analysis of WPI showing a change in weights of commodities due to subsequent change in the price level, an analysis of a relatively more flexible market i.e. the stock market of the country (NSE) discussing causes for the change in quantity demanded of equity shares, and analysis of a survey conducted at a local area to find out how demand is aspiration-driven. The last section puts forth the analysis based on both primary and secondary data. The study concludes that while the role of price, income, and aspirations have important roles in shaping our demand schedule, the understanding that the price–demand relationship is inverse, is a simplistic one.

The present study takes consumer preferences as the primitive and a most general formulation of a linear demand system as the desideratum. To investigate how the two are related, I take a novel approach to demand integrability that relies on some recent results in Diasakos and Gerasimou (2020). The methodology applies for either of the two possible price-normalization regimes (with respect to the price of a numeraire commodity or income); in either case, it leads to a complete characterization of linear demand systems in terms of the properties for the underlying rationalizing preference relation, and analytical solutions for the corresponding (direct) utility function. My results provide a proper microfoundation for linear demand systems-in a way that addresses knowledge gaps in the extant literature on linear demand that leave space for fundamental misunderstanding. JEL Classifications: C02, D01, D11 An earlier version was presented at a session of the 20th annual SAET conference; I wish to thank the participants for helpful comments.

Supply chain disruptions, which have become commonplace, are often associated with globalization and trade. Little is known about optimal policy in the face of insecure supply chains. Should governments promote resilience by subsidizing backup sources of input supply? Should they encourage firms to source from closer and presumably safer domestic suppliers? We address these questions in a very simple model of production with a single critical input and with exogenous risks of relationship-specific and country-wide supply disturbances. We follow Matsuyama and Ushchev (2020) in positing a class of preferences that are homothetic with a single aggregator and that obey Marshall's Second Law of Demand. The familiar case of CES preferences is a member of the class, but it imposes restrictions that are important for policy conclusions.We find that, in the CES case, a subsidy for diversification achieves the constrained social optimum and dominates a policy that promotes reshoring or offshoring. When the demand elasticity rises with price, two policy instruments generally are needed to achieve efficient supply chains, private investments in resilience may be socially excessive, and policy that alter incentives to invest at home versus abroad may achieve greater welfare than ones that encourage or discourage diversification.

Information cascades are common in real social life, because of information cascades can lead to blind follow-up by users, it is easy to have a bad impact on society. This paper proposes a new method to research on the online shopping user behavior based on information cascades. By collecting date from jd between October 1, 2019 and September 30, 2020, this paper constructs unbalanced panel data, empirically tests the information cascade effect in online shopping users’ Behavior, and study the mixed impact of information cascade and online word-of-mouth on users’ shopping behavior. The results show that the relative popularity of goods has a significant impact on its sales, showing an obvious information cascade effect. The number of comments has no impact on the sales volume of high ranked goods, but has a positive and significant impact on the sales volume of low ranked goods, and the user score has no impact on the sales volume of goods. The law of demand is still valid for high ranked commodity sales. For the lower ranked products, the price represents the quality information of the products and has a positive impact on the sales volume.

The tension between the United States and China has not ended, despite the lengthy negotiations carried out in 2019 to appease differences and decrease protectionism over the technology industry, since the trade war was producing devastating consequences for both powers and international trade. The resurgence of tension is due to two main factors, such as mutual accusations about who is to blame for the origin of COVID-19 and the use of the new 5G mobile technology by Chinese companies like ZTE and Huawei. We developed an in-depth analysis of the consequences on international prices of the technology industry and international trade due to the reappearance of the trade conflict between China and the United States. This analysis will be carried out through the application of economic theories. There is greater distrust in the technology sector, and this produces a variation in the price of the technology industry. Likewise, according to Marshall’s law of demand and supply, this effect can be explained more accurately;since there was a lower demand for technological products, the digital industry will have to lower its prices to generate income. © 2021 by Emerald Publishing Limited.

We use Kosovo’s transaction-level import value, tariff duties and transport cost data for very finely disaggregated products to test the Alchian–Allen conjecture. First, we show that the elasticity...

Veblen products are luxury goods possessed by the persons to mostly exhibit their pride in the society and their demand increases with the increase in the price. For these products, constituting a sizable share of the market, no work is found in the available literature to determine inventory management policies. The present paper, besides doing so, studies the effect on the inventory policy with changes in inventory cost parameters for some demand profiles (Leibenstein 1950) for a single retailer. Sensitivity analysis demonstrates that optimal price for Veblen products for the maximum profit occurs only on those parts of demand curve that follow the Law of Demand (Marshall 1898) and will not be affected by the changes made either to holding cost rate or ordering cost except that to the unit cost. However, optimal inventory policy is found to get affected with the change in all the three parameters.

Do poor households shop in a way that leaves money on the table? A simple way to maximize consumption, conditional on available cash, is to avoid regularly purchasing small amounts of nonperishable goods when bulk discounts are available at modestly larger quantities. Using two-week transaction diaries covering 48,501 purchases by 1,493 households in Tanzania, this article finds that through bulk purchasing the average household could spend 8.7 percent less without reducing purchasing quantities. Several explanations for this pattern are investigated, and the most likely mechanisms are found to be worries about over-consumption of stocks and avoidance of social taxation. Contrary to prior work, there is little indication that liquidity constraints prevent poorer households in the sample from buying in bulk, possibly because the bulk quantities under examination are not very large.

The paper analyzed the demand for imported rice, local rice, maize, and other cereals in Nigeria. Using the second wave data of the Nigerian Living Standard Measurements Survey - Integrated Survey on Agriculture, it employed the Quadratic Almost Ideal Demand System model for empirical analysis. The result indicates that the imported and local rice are proved to be normal goods. However, imported rice is a luxury item while local rice is a necessity. The compensated and uncompensated own-price elasticities for imported and local rice are negative, indicating that an increase in own-price will decrease its own-demand in line with the law of demand. The estimates of uncompensated cross-price elasticity show that imported rice and local rice are complements in Nigeria. Finally, the study represents an effort to disaggregate food demand analysis to obtain useful information on price and other factors determining the demand for specific foods.

Scientific knowledge can be distilled into a set of laws that are sufficiently general and robust to be useful in describing and predicting behaviour – the behaviour of physical objects (the orbits of the planets, for example), invisible forces (electricity), economies (why some prosper and others languish) and people (education as deliberate investment in human capital). This paper identifies four empirical regularities in consumption behaviour that are sufficiently general and pervasive to qualify as 'laws': Engel's law; the law of demand (the downward‐sloping demand curve); quantities more dispersed than prices; and the 'law' of -12 for price elasticities. In each case, I survey previous research, use international evidence to illustrate the workings of the laws and demonstrate their practical use. [ABSTRACT FROM AUTHOR] email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Estimating potential effects of price reforms is a key issue for many developing countries. Demand studies increasingly use household survey data on budget shares, which vary with quantity, price, and quality. If quality response to price is ignored, estimated price elasticities of quantity demand conflate responses on quantity and quality margins. Our review finds over 80% of published studies using budget shares from household survey data have this error. We use survey data from Vietnam, with prices and qualities observed over space, to directly estimate the price elasticity of quality. This is much larger than what is derived from the income elasticity of quality, based on the Deaton (1988) separability restrictions. Across the 45 items we study, the own-price elasticity of quantity demand is overstated by a factor of four, on average, if the response of quality to price is ignored.

We extend upon Reeves (2020), who attempts to demonstrate that classical violations of the Law of Demand are in actuality the result of a violation of the ‘ceteris paribus’ assumption. For example, price changes in Giffen goods create a chain reaction from the Giffen good through a substitute and back to the Giffen good. Specifically, a price change in the Giffen good is so large wrt the consumer’s income that it creates an income effect on a substitute good, whose decrease in demand sends a shock to the Giffen good’s demand curve, shifting it out through a change in preferences and, hence, violating ceteris paribus. To understand how preferences change, consider the consumer equilibrium condition, MU(x) = λp. When price increases and income (i.e. λ) is held constant, marginal utility must increase. In order for x to increase with price, marginal utility must increase with consumption, violating the Law of Diminishing Marginal Utility. Hence, the change in price must precipitate a change in preferences because for some values of x preferences comport with the Law of Diminishing Marginal Utility whereas for other values of x preferences do not. In this paper, we respond to the non-technical aspects of Jensen and Nolan (2007) by suggesting that the price and demand changes that they are measuring are likely changes along the supply curve, not an upward sloping demand curve. One possible reason for the purported oversight is that the research explores Giffen effects in (good1 , good2 )-space, which cannot capture shifts in the demand curve, defined in (good1 , price1 )-space.

This paper considers a monopolist firm selling two collections of a single product sequentially to satisfy consumers' different social externalities. The first "capsule" collection has a unique design and is sold within a limited time frame. The second "mass" collection has the same functional features except for the appearance. Both snobs who pursue exclusivity and conformists who desire conformity are present in the market. Speculators, who have no consumption value for the product, enter the market to speculate quick money by reselling the purchased capsule collection on the resale market. All three groups of buyers are forward-looking. We examine the monopolist's pricing and production decisions at the beginning of each period and the buyers' behavior in each market. We find only snobs and speculators are willing to purchase the capsule collection. In the selling season of the mass collection, a large proportion of conformists lead to an upward-sloping demand curve, which allows the monopolist to use a "static" pricing scheme for both collections. Even though the monopolist can price the speculator out, she sets a lower price and releases more capsule products to foster the resale market. It can rivet the snobs with the capsule collection and reduces their protective effects on the law of demand for the mass collection. The resale market's presence also triggers more need for the mass collection by social influence and increases consumers' valuation of the product. Finally, we identify the conditions under which the monopolist prefers static pricing to dynamic pricing.

This paper investigates the existence of unique equilibrium in two-good economies where agents have preferences with the same relative risk aversion and different utility weights. Aggregate demand behavior is characterized in terms of both macrolevel and micro-level information inherent in the economy. At the macro level, the economy makes it possible to build two representative-agent economies that provide a lower and upper bound of the price range for potential equilibrium prices. Information at the micro level is inferred by elucidating the global structure of individual demand function. When relative risk aversion is greater than 1, the price effect over the price domain is single-peaked at the inflection price that represents the maximal dominance of the income effect over the substitution effect. Based on the analysis of the first-order and second-order price effects, two sufficient conditions are presented for the uniqueness of equilibrium. The result of the paper sheds a light on the Sonnenschein-Mantel-Debreu theory that has negative implications for systematically studying the uniqueness of equilibrium.

Among the paramount drivers of globalization and the world economy, global oil prices are traditionally named. Most significantly they influence the economy of the countries with export oriented for raw materials. The Russian Federation is among those ones. This study aims at analyzing the impact of global oil prices on the RF’s foreign trade statistical indicators. General scientific methodology and statistical and econometric methods are applied in this research. Statistical data demonstrate the coincident changes in global oil prices, foreign trade turnover and the volume of the Russian commodities export. Herein, oil is not affected by the law of demand, since it belongs to the strategical goods with an inert demand. Thus, the indicator of Russian foreign trade turnover, that was forecasted adjusted for oil prices dynamics, demonstrates a further downturn.

This research analyzes the cocaine market from an economic perspective. The consumption of the coca leaf is ancient, and cocaine has been consumed for over 100 years. Longitudinal data from producing countries is taken to estimate cocaine cost structure, and longitudinal data from regions around the world is taken to estimate demand curve. Data is annual and comes from United Nation Office on Drugs and Crime reports. A microeconomic model under imperfect competition is calibrated to estimate volumes and prices of cocaine under illegal market and legal market. Results show that cocaine production has internal economies of scale, and the demand curve satisfies law of demand. Moreover, the world demand for this narcotic segmented by regions is elastic and normal good as income increases. From this economic picture, it is necessary to regulate this market efficiently through price within a context of legality in production and consumption.

International audience; The increase of demand in price, an exception to the law of demand, is known as the Veblen effect. In this work, we consider a profit maximizing monopoly which by means of advertising impacts the price-demand relationship. We show that advertising and goodwill play an important role in making the Veblen effect more prevalent than expected. By employing optimal control theory we capturethe evolution of the variables over time which may exhibit the Veblen effect where price and demand move in the same direction. Incorporating this dynamics into firms' decisions has a promising impact on long-term profit. Consequently, it may even trigger a slew of studies on product line extension, competition and pricing by allowing firms to control their status.

This study uses choice experiment to investigate men and women consumers’ preferences and willingness to pay for edible mushrooms in Ghana. We used a mixed logit model to examine preference heterogeneity. The econometric modelling revealed that men consumers have a negative utility for oyster mushrooms compared to straw mushrooms. They also have preference for cheap and locally cultivated mushrooms compared to expensive and imported mushrooms. However, women consumers have preferences for the shiitake mushroom variety compared to the straw mushroom variety. They also prefer cheap mushrooms irrespective of their location and such mushrooms must be frozen and not fresh. The findings highlight variation between men and women in preferences for mushroom variety, however, both have preferences for low prices, suggesting that both genders are economically rational and obey the law of demand. JEL codes: B21, D12

Islamic Microeconomics is an economic study that discusses the behavior of individuals in carrying out their economic transactions with the norms applied with the limitations of the Qur'an and Sunnah. The understanding of the market is a place or condition that brings together demand with the bidder (buyer and seller) for each type of goods, services or resources. While the function is the relationship between variables one with other variables, with the change of a certain variable can be assessed and known in knowing and analyzing other variables. Equilibrium is a balance that occurs in a relatively long period of time and under certain conditions as a result of the intersection of demand and demand. As for the contributions of classical Muslim economists including the Al-Shahabah Risalat by Abdullah bin al-Muqaffa (109-145H / 727-762M) the contents include the administration of state finances, Al-Kharaj by Abu Yusuf (113-182H / 731-789M), Al -Kharaj is by Yahya bin Adam al-Qurasyi (140-203H / 757-818M), Al-Amwal by Abu Ubaid al-Qasim bin Sallam (157-224H / 774-838M), Al-Amwal by Abu Hamid bin Zanjawaih (180 -251H / 796-865M). Abu Yusuf's famous thoughts on the book Al-Kharaj also Al-Ghazali regarding the law of demand and supply.

Recently in these Letters, Franks and Bryant (2017) provided new necessary and sufficient conditions for the Uncompensated Law of Demand (ULD) when consumer income is exogenous and not price dependent. We now consider price dependent incomes, and provide new necessary and sufficient conditions for the ULD to hold for a consumer in an exchange economy. Like Franks and Bryant (2017), these conditions avoid unobservables such as preferences or utility and hence are ’Revealed Preference’ in character. Our Theorem 1 establishes that consumers in an exchange economy satisfy the ULD if and only if they consume exactly and only their initial endowment. Interestingly, unless a consumer lives in a state of personal autarky, there will always be a price variation for which their behaviour violates the ULD.

Measuring substitution possibilities is crucial for estimating the costs and benefits of climate, trade, banking, and many other policy issues. This paper addresses two problems encountered when modeling substitution: spurious correlations arising from data with trends and violations of the law of demand. This paper shows how the dynamic linear logit model addresses these two problems. First, the model allows adjustment in quantities and, thereby, avoids spurious correlations arising from data with significant trends. Secondly, the linear nature of the substitution elasticities facilitates parameter restrictions to ensure that substitution estimates are consistent with the law of demand and the mathematical conditions consistent with cost minimizing behavior by producers. These features are illustrated by estimating the dynamic linear logit model for energy demand in the U.S. industrial sector. The empirical results demonstrate that the dynamic linear logit model is well suited for data with common trends and for ensuring robust and intuitively appealing estimates of demand elasticities and associated substitution possibilities.