What is Law of Demand? What are the factors that influence Demand?

The law of demand is related to the demand of a good and its relation with price, availability, quality etc. Actually, price is a key factor that controls the market and Demand but as the income of the consumer increases, other factors became dominant over price.  Generally, It states that there is an inverse relation between the price of the given good/commodity and the quantity of demand of the same good/commodity while other factors remain constant. 

When the price of a good or commodity increases the quantity of demand decreases and when price of a good or commodity decreases the quantity of demand increases, while other factors are kept constant. This shows that the demand of the given good/commodity is inversely related to the price of the given good/commodity. 

The factors which influence the demand are: 

Price: If the price of the good/commodity increases, demand of the good/commodity decreases, and if the price of the good/commodity decreases, demand of the good/commodity increases. Therefore, price of a good/commodity is a key factor that influences the demand of the good/commodity. 

Availability of Substitutes: If there are substitutes of a given good/commodity, then the demand of good/commodity is decreases as the quality and price increases more favorably to the consumer.

Compliments & Quality: If the good/commodity carry compliments and quality then it outcast the inferior goods/commodities from the market. Therefore, if complement & quality of good/commodity increases, the demand of the same good/commodity increases, and vice-versa, other factors remain constant. Therefore, compliment and quality are linear factors for the demand of the good/commodity.

Income of the consumer: Income of the consumer creates consumer market for a good/commodity.  If average income of the people is high, demand of good/commodity including the quality good/commodities is also high.  Price and income form two most influencing factors in market demand.  Note that, the income does not mean for higher demand of certain good/commodity.  For example, if income of a consumer is increases continuously, then first, demand of necessity good/commodity is increases and then demand of luxury commodities.

Taste of the consumer: If the consumer is in favour of the given good/commodity, then the demand for the given good/commodity increases while in the reverse scenario, the demand for the given good falls. Taste of the consumer is perfectly depends on the income and necessity of the consumer.

Technological Edge: Demad of high quality goods is remain high even if their prices are larger than the inferior quality goods.  This is due to the satisfaction and trust on the high quality goods.

Essentiality of demand: If a good/commodity is essential, then its demand increases with time and if good is not essential then its demand decreases with time.  For example, since 2007 demand of smartphones have been significantly increases due to expansion of internet based consumer services. 

Government Control : Government control on the commodity is generally known as rationing of the commodities or quota system. Rationing is applied by the government on those commodities whose either demand or supply is high, to control their prices and their equal distribution.  For example, if demand of a commodity is high and price is low (like subsidise domestic cooking gas) then government applied quota on the sale of the commodity to avoid its misuse (i.e. use of subsidise domestic cooking gas for commercial purposes). Similary, if there is large supply of commodities and demand is not adequote then prices of commodities starts falling. To prevent price crash, government either lifts controls or takes suitable measurements to control the prices of these commodities.

The Law of demand is applied on standard commodities under the normal conditions. It does not applicable to the Giffen Goods and other essential commodities in the adverse conditions. For example, in case of famine or war, even if a commodity is inferior but essential, like foods and medicines, increase in price of essential commodities does not decrease their demand. But  both price and demand increases simultaneously.  One major factor that is visible here is that people started cutting out expenses on the luxurious commodities, like packed food, readymade cloths, cars etc.