Asked by IsmailEconomics 📈

Why does the demand curve slope downwards?

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Sultan Ali

UCL Graduate and Fully qualified accounting and economics teacher

The demand curve slopes downwards as it depicts the fundamental relationship, as the price of a product falls there’s an increase in the quantity demanded and vice versa

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Sarah Terris

UCL Graduate in Pharmaceutics with 3 years of tutoring experience

When the price of a commodity falls, the consumer's real income rises that is he can now purchase more of the commodity with the same income.

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Mevin Wan Wan

I love to inspire people to realise their own potential.

For example, if you are looking at the demand curve for sugar, at the price of £3.00, 100 units of sugar is demanded, whereas at the price of £2.00, 200 units of sugar is demanded. This is intuitive as people generally buy more products that are lower in value. hence, the demand curve has a negative slope.

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Ismail Jeilani

BSc Political Economy | Ex-Google | 7 years Teaching Experience

The income and substitution effect can also be used to explain why the demand curve slopes downwards. If we assume that money income is fixed, the income effect suggests that, as the price of a good falls, real income - that is, what consumers can buy with their money income - rises and consumers increase their demand.

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