In two or three sentences, explain the law of downward-sloping demand.

Question

In two or three sentences, please explain the law of downward-sloping demand, highlighting its significance in economics and how it illustrates the relationship between price and quantity demanded.

Anonymous · Accepted Answer

The demand curve slopes downwards due to the following reasons (1) Substitution effect: When the price of a commodity falls, it becomes relatively cheaper than other substitute commodities. This induces the consumer to substitute the commodity whose price has fallen for other commodities, which have now become relatively expensive. As a result of this substitution effect, the quantity demanded of the commodity, whose price has fallen, rises. (2) Income effect: When the price of a commodity falls, the consumer can buy more quantity of the commodity with his given income, as a result of a fall in the price of the commodity, consumer's real income or purchasing power increases. This increase induces the consumer to buy more of that commodity. This is called income effect. (3) Number of consumers: When price of a commodity is relatively high, only few consumers can afford to buy it, And when its price falls, more numbers of consumers would start buying it because some of those who previously could not afford to buy may now afford to buy it, Thus, when the price of a commodity falls, the number of its consumers increases and this also tends to raise the market demand for the commodity. (4) various uses of a commodity (5) law of diminishing marginal utility Hope This Helps God bless

Anonymous · Answer

Demand is downward sloping because as the price increases ceteris paribus, consumers are willing to purchase less of the given good or service. On the other hand, as prices decrease the quantity demanded by consumers for the particular good or service will increase. This is because the price has become more attractive to consumers and because they will be able to afford more of the good or service. This shows that the demand curve is inversely related to changes in the price of a good or service.

Anonymous · Answer

In economics, demand is illustrated using the downward sloping demand curve, which is a graph that illustrates the relationship between price and quantity demanded for a good or service.  The demand curve is a visual representation of the demand schedule, which shows quantity demanded at different prices.

Anonymous · Answer

The income and substitution effect can also be used to explain why the demand curve slopes downwards. If we assume that money income is fixed, the income effect suggests that, as the price of a good falls, real income - that is, what consumers can buy with their money income - rises and consumers increase their demand.

Anonymous · Answer

The law of demand states that as the price of a good decreases, the quantity demanded of that good increases. In other words, the law of demand states that the demand curve, as a function of price and quantity, is always downward sloping.Explanation: hope this helps!

Nona Gerhold

In two or three sentences, explain the law of downward-sloping demand.

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