State the law of demand and six basic assumptions as related to agricultural products. Illustrate your answer with the aid of a demand schedule and a demand curve
Explanation
(a) The law of demand states that the lower the price, the more or higher the quantity of agricultural produce that will be demanded or the higher the price, the lower the quantity of produce that will be demanded.
(b) Six basic assumptions as related to agricultural products are that:
(i) No very close substitutes for commodity exist.
(ii) There is no change in tastes and preference of the consumers.
(iii) The amount of money or income of the consumers remain constant.
(iv) There is no change in the quality of products.
(v) The habits of consumers remain unchanged.
(vi) The prices of other goods remain constant.
Example of a Demand schedule
| Price (=N=) | Quantiy demand (kg) |
| 80 | 10 |
| 60 | 20 |
| 40 | 30 |
| 20 | 40 |