Answer to Question #116794 in Microeconomics for Avneet

Question

A demand curve is downwards sloping? Explain with economic reasoning and an appropriate diagram.

Answer 1

The demand curve slopes from left to right in a decreasing manner due to several factors, one being, the law of diminishing the marginal utility, which states that with each increasing quantity of the commodity, it’s marginal utility declines. Thus, when the quantity of goods is more, the marginal utility of the commodity is less. Thus, the consumer is not willing to pay more price for the commodity and its demand will decline. Hence, the demand curve slopes downwards from left to right.