The market demand curve in a perfectly competitive market is downward sloping.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the demand curve is downward sloping because as the price of the product goes up, the quantity demanded by consumers goes down. This is due to the presence of substitute products and the law of diminishing marginal utility, which states that as a consumer consumes more of a good, the additional satisfaction or utility they receive from each additional unit decreases.

The Market Demand Curve in a Perfectly Competitive Market Is