What is the first requirement for the law of demand?

The first requirement for the law of demand is the concept of "ceteris paribus," which is a Latin phrase meaning "all other things being equal." This assumption is crucial because it allows economists to isolate the relationship between the price of a good and the quantity demanded while holding constant other factors that might affect demand, such as consumer income, tastes, and the prices of related goods.

By applying the ceteris paribus assumption, we can accurately analyze how changes in the price of a specific good influence the quantity that consumers are willing to purchase. For example, if the price of a product decreases, the law of demand states that, ceteris paribus, the quantity demanded for that product will increase, as consumers are more likely to buy more of it at a lower price.

The other options, while related to market dynamics, do not serve as foundational requirements for the law of demand. An increase in consumer income can affect demand but is not a prerequisite for understanding how price influences quantity demanded. Market competition can influence demand dynamics as well, but it does not directly establish the relationship stated in the law of demand. Maximum pricing is a regulatory mechanism that could impact market behavior, but it is not a fundamental concept underlying the law itself