Like with all the laws , they all tend to be idealistic . It happens in every field , physics , economy and what not . Same is the case with law of demand and law of supply. In economics as I understand Demand is need or wish but not desire . and supply is availability .
A colleague of mine who had then rented an apartment at Mayur Vihar , Phase-1 , Delhi ,before moving on to her next posting , explained me her Domestic maid woes . As the law of demand says the quantity demanded decreases with increase in price . The availability of maids completely violates this law . More number of Maids are available as the wages increases , the monthly ages are sometimes more than thrice of minimum wages than the MGNREGA 2.0 workers’ pay.
Ohh yes , the same question popped up in my mind as is your’s , now who is reading this piece , does it mean the availability of domestic maids follow law of supply ??? .
In a far-flung village of coastal A.P , at my mom’s native place , my mom’s childhood friend owns a small cafeteria which sells breakfast and snacks apart from tea and coffee . On her invitation I had the wonderful chance of observing the rusty village for an entire day. Coming to the issue of maids , here the scenario is completely opposite , due to the excellent implementation of social welfare schemes in technologically advanced state like A.P , in spite of extremely high wages offered the quantity of maids available are extremely low .
Yes , It does violates the law of supply .
Like every citizen of India says , this is India , here every law is violated . Talking about India and not mentioning about GOLD is totally impossible .
GOLD for other countries is a prestige good according to the definition given by Thornstein Veblen . But ,,,,,,,,, in INDIA , it neither follows law of demand nor law of supply . When price decreases , people buy more and more and even when price increases people buy even more . Even it cannot said to be an inferior good , as the people who posses it are no-where prosperous nor the people who don’t . It’s entirely a peculiar case , may be somewhere down the line some great economist will come up with a fancy term for such good .
But yes, one thing is certain INDIAN philosophy completely justifies the law of supply and demand .
🙂 You may wonder , how ??? , Let it be Buddhism , Jainism or Hinduism all of them say , the more an individual commits wrong actions the more price he/she has to pay ,, LAW of SUPPLY , isn’t it ??? .
Even it also preaches LAW of DEMAND , the more your greed increases ( quantity demanded) the more price ( monetarily / emotionally ) you have to pay .
Anyway , let me keep all these laws for the books and turn the pages to wish all my fellow INDIAN citizens whether in INDIA or at distant lands , HAPPY REPUBLIC DAY , the day when the longest , heaviest bulkiest constitution was adopted .