The reason individual demand slopes downward is that
A)market demand slopes downward.
B)a fall in price causes marginal utility to fall.
C)when price falls, an individual consumes more in order to use all of his or her income.
D)when price falls, total utility can be increased when more of the good is purchased.
E)when price rises, total utility can be increased when more of the good is purchased.

Question

Quizplus · Accepted Answer

The downward slope of the individual demand curve is primarily due to the law of diminishing marginal utility, which states that as more of a good is consumed, the additional satisfaction (marginal utility) gained from consuming one more unit of the good decreases. Therefore, when the price of a good falls, consumers are willing to buy more of it because the lower price means that the utility per unit of expenditure increases, allowing them to maximize their total utility.

The Reason Individual Demand Slopes Downward Is That