State Gossen's two laws.6.

Meaning:demand is not mere desire — it is desire backed by the ability to pay and thewillingness to pay, at a given price and time. (The beggar's desire for a car is not demand; the officer's plan to buy a scooter is.)Determinants of demand (the "demand function" — learn as a list with symbols):1. Price of the good itself (P) — the prime mover;2. Income of consumers (Y) — and the good's character: normal goods (demand rises with income — meat, cars) vs inferior goods (demand falls as income rises — coarse grain, cheap noodles);3. Prices of related goods (Pr) — substitutes (tea↔coffee: coffee's price up ⇒ tea's demand up) and complements (petrol↔motorcycles: petrol dearer ⇒ motorcycle demand falls);4. Tastes, habits and customs (T) — festivals included: goat demand leaps every Dashain;5. Expectations (E) — of future prices or income (rumour of a fuel shortage ⇒ queues today);6. Population size and structure (N) — more households, more demand; a young population demands schools, an ageing one demands care;7. Distribution of income — equal societies demand mass goods; unequal ones demand luxuries.The Law of Demand:other things remaining equal (ceteris paribus), the quantity demanded of agood varies inversely with its price. A demand schedule (individual and market) plots this; the demand curve slopes downward — from top-left to bottom-right.Why downward (the three…