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Question on Demand Curves

Cr4zyM4tt
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5/5/2016 4:20:35 PM
Posted: 7 months ago
Q1) Is the downward sloping curve of the demand curve due to the law of demand where as price decrease, the quantity demanded increase or is it due to the law of diminishing marginal utility where as more quantity is consumed by the customer, the value he places on the next unit of good decreases? My textbook just say that the law of diminishing marginal utility is the reason for the downward slope, but I can't relate to it.

Q2) I would also like to ask if demand curves touches the y axis (price), cause it doesn't make sense for people demand 0 quantity at a certain price.

Any help is appreciated thanks!
ResponsiblyIrresponsible
Posts: 12,398
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5/5/2016 5:19:20 PM
Posted: 7 months ago
At 5/5/2016 4:20:35 PM, Cr4zyM4tt wrote:
Q1) Is the downward sloping curve of the demand curve due to the law of demand where as price decrease, the quantity demanded increase or is it due to the law of diminishing marginal utility where as more quantity is consumed by the customer, the value he places on the next unit of good decreases? My textbook just say that the law of diminishing marginal utility is the reason for the downward slope, but I can't relate to it.

The law of demand. Diminishing marginal utility features in indifference curve, from which we derive demand curves.

Q2) I would also like to ask if demand curves touches the y axis (price), cause it doesn't make sense for people demand 0 quantity at a certain price.

This is interesting... I mean, I think that would make sense. Let's say we're looking at a demand curve for a certain market of televisions, and the price skyrockets to $5000. You might say, "Well, screw it, I'll go buy from the competitor," in which case you demand zero televisions at a price of $5000, but at a price of, say, $4,999.99, you'd be fine with purchasing one.

Any help is appreciated thanks!
~ResponsiblyIrresponsible

DDO's Economics Messiah