Answer to Question #247771 in Economics of Enterprise for Sadam Dine

Question

According to the law’s Demand, the higher the price of commodity, the lower will be quantity demand. Explain why.

Answer 1

This occurs as a result of diminishing marginal utility, that is, consumers will always use the first units of an economic commodity they have bought to serve their most urgent needs first, and the use each additional unit of the commodity to serve successively lower-valued ends.