Why does the demand curve slope downwards?
VERIFIED
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
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.
VERIFIED
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.
VERIFIED
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.
Answers from these tutors
Asked in Economics 📈
ASKED BY LAURA
ECONOMICS 📈Can you help by explaining to me the basic on poor housing and inequality of opportunity?
I'll be as brief as I can Laura! Firstly, I need to know what you mean by poor housing. Does it mean: 1. Poor quality housing 2. Housing with reside...
ASKED BY SELINA
ECONOMICS 📈What is economies of scale? And how does it impact cost?
Scale economies have brought down the unit costs of production and have fed through to lower prices for consumers. Most firms find that, as their pr...
ASKED BY DUAFATEMA
ECONOMICS 📈1Using income elasticity of demand explain the reasons for the increase in profits during the recession for businesses like Aldi, Lidl etc?
Income elasticity of demand refers to the responsiveness of a demand for a product to a change in income. Sometimes demand for some products rise wh...
ASKED BY IFEANYICHUKWU
ECONOMICS 📈What are the determinants of aggregate demand in the short and long run?
In the short run: Consumption+Investment+Government Spending+Net Exports These are the same in the long run, the difference between the short run an...
ASKED BY LAURA
ECONOMICS 📈Can you please explain the basics on poor housing and inequality of opportunity for economics????
I'll be as brief as I can Laura! Firstly, I need to know what you mean by poor housing. Does it mean: 1. Poor quality housing 2. Housing with reside...
ASKED BY BONNIE
ECONOMICS 📈What are health care services?
Health care services relate to bodies, organisations and facilities which are set up to take care of your health. For example, basic health care ser...
ASKED BY VALENTINE
ECONOMICS 📈Explain supply and demand please?
Demand is the willingness to purchase a given good or service at a particular price at a given time. Supply is the willingness of manufacturers to s...
ASKED BY KAT
ECONOMICS 📈Why has the US trade deficit narrowed recently ?
The US trade deficit actually recently recorded its first rise in four months. Prior to this, the narrowing largely should stemmed from increases in...
ASKED BY INES
ECONOMICS 📈What is GDP and GNI?
GDP or Gross Domestic Product is one of the most widely used measures of an economy’s output. 📈 It could be defined as “the total value of goods an...
ASKED BY JACKSON
ECONOMICS 📈How interest rates affect market participants?
Interest rates are very important in our economy, first thing first, interest rates refers to the cost of borrowing. Now in terms of consumers, if t...
Find me a tutor
We take your privacy seriously. View our policy.