ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -According to this principle, the marginal utility of a commodity reduces when the quantity of goods is more. Consequently, when the quantity is more, the prices will fall and demand will increase. Hence, consumers will demand more goods when prices are less. This is why the demand curve slopes downwards.

Detailed explanation-2: -When the price of commodity increases, its demand decreases. Similarly, when the price of a commodity decreases its demand increases. The law of demand assumes that the other factors affecting the demand of a commodity remain the same. Thus, the demand curve is downward sloping from left to right.

Detailed explanation-3: -The IS curve is downward sloping because as the interest rate falls, investment increases, thus increasing output. The LM curve describes equilibrium in the market for money. The LM curve is upward sloping because higher income results in higher demand for money, thus resulting in higher interest rates.

Detailed explanation-4: -There are at least three accepted explanations of why demand curves slope downwards: The law of diminishing marginal utility. The income effect. The substitution effect.