A consumer's demand curve slopes downward because as the
A) price of a commodity rises, the marginal utility per dollar falls relative to other goods so that less will be purchased to restore equilibrium.
B) average utility of the commodity rises, the price falls; this increases the individual's consumption.
C) price of a product rises, its total utility rises, so the consumer will buy less.
D) consumer buys more, total utility falls, so he or she is not willing to pay as much for the units.
E) price of a commodity falls, demand decreases.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a consumer consumes more of a good, the marginal utility (satisfaction) derived from each additional unit of the good decreases. Therefore, as the price of a good increases, the marginal utility per dollar spent on that good decreases relative to other goods, leading the consumer to buy less of the good to restore equilibrium. This results in a downward-sloping demand curve.

A Consumer's Demand Curve Slopes Downward Because as the