Theory of Demand and Supply & Market Equilibrium Pricing 📈

### How Consumers React to Prices: The **Law of Demand** states that, *all other things being equal (ceteris paribus)*, as the price of a good increases, the quantity demanded decreases; and as the price decreases, the quantity demanded increases! #### Reasons for Downward Sloping Demand Curve: 1. **Law of Diminishing Marginal Utility**: The extra satisfaction derived from consuming additional units of a good declines. 2. **Income Effect**: Lower price increases the purchasing power of real income. 3. **Substitution Effect**: When the price of yams rises, consumers substitute with cassava or plantain!