a summary explanation

Is the Law of Demand Wrong? - Instructor Comments /l\\fll:l\\ Michael Harvath \\ / Sep 13 at 9:23 PM The Law of Demand says that at a higher price, people will buy less of a good, all other variables staying the same. When we have ination, incomes are usually rising also, so people have more money to buy goods, which makes them buy more goods. It is totally possible for people to buy more goods when they have more money even if prices are higher, and this does not break the Law of Demand. Many of our contributors here said exactly that, and so were exactly right. I also want to point out that the "all other variables staying constant\" part of the law applies to prices of other goods too. So that when hamburgers rise in price, people buy fewer hamburgers, and a good part of the reason is that they are switching over to pizza, which is relatively cheaper than hamburgers now. But if pizza prices are rising too, then people buying hamburgers will not switch over to pizzas, and most likely will continue buying hamburgers, especially if their income is rising so they can afford to do so