The law of demand (downward-sloping demand curve)is based on the idea of
A) maximum total utility
B) minimum marginal utility
C) total utility divided by quantity of the good consumed
D) law of diminishing marginal utility
E) consumers minimize total utility

Question

Quizplus · Accepted Answer

The law of demand, which posits that demand decreases as price increases, is fundamentally based on the law of diminishing marginal utility. This principle states that as a consumer consumes more of a good, the additional satisfaction (marginal utility) gained from consuming an additional unit of the good decreases, leading to a lower willingness to pay for more units.

The Law of Demand (Downward-Sloping Demand Curve)is Based on the Idea