In micro-economics, why is a demand curve downwards sloping?

A downwards sloping demand curve in a supply and demand diagram for micro-economics sits on a X axis named quantity and Y axis named price. The demand curve is linear and slops downwards start from Q=0 and P=X. A rational consumer can conclude that on any given point along the demand curve, as you move along it, quantity increases as price decreases, which is expected of consumer behaviour.However, economists have gone on to say it is also because of marginal utility. Utility is the total satisfaction received by the consumer, and the maximum price the consumer is willing and able to pay represents this metric on the demand curve. The theory suggests that after reaching a certain quantity, the consumer will no longer be as satisfied as their first purchase, hence a decrease in utility, meaning a decreasing marginal utility. Hence, the more a good or service a consumer uses, the less marginal utility per additional unit is received, resulting in a downwards sloping curve.

HB
Answered by Hugh B. Economics tutor

1854 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

What are arguments in favour of protectionist policies?


What are the effects of price controls such as a maximum price (price ceiling)


Discuss the view that overuse of common access resources is best addressed by the government


Work out the price elasticity of demand of Coca Cola when the demand rises from 1 million to 2 million following a price decrease of £1.50 to £1.35. Is this price elastic or price inelastic?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences