Demand analysis and consumer behaviour

Demand is not mere desire: it is desire backed by the ability and willingness to pay, at a price, in a period. The law of demand says that, other things equal, a lower price brings higher quantity demanded. Worked example: if the price of a good falls from ₹100 to ₹80 and quantity demanded rises from 1,000 to 1,500 units, the arc elasticity is (500 ÷ 1,250) ÷ (−20 ÷ 90) = 0.4 ÷ (−0.222) = −1.8 in absolute value 1.8 — demand is elastic, so the price cut raises total revenue.