Assumptions on which the law of demand is based

The law of demand is based on the basic assumption that ‘other things remain equal’ or unchanged. This means that

• Prices of related goods (substitutes and complementary goods ) remain same or unchanged,
• Consumers’ income or budget remains unaltered,
• There is no change in tastes, preferences or choices of the consumers,
• The good in question is a normal good and not an inferior good,
•  All units of the good under consideration are homogeneous, inentical or exactly alike, and
• All external environmental factors remain same in the sense that weather, climatic conditions, threat of war, political and other external conditions remain the same.