Answered

There are 3 reasons why the demand curve is downward sloping. From the following choices, which one is NOT a reason?

Select one:
A. Tastes/preferences
B. Substitution effect
C. Income effect
D. Law of diminishing marginal utility



Answer :

GinnyAnswer

Final answer:

The law of diminishing marginal utility is not a reason for the downward slope of the demand curve; tastes/preferences, substitution effect, and income effect play a role.


Explanation:

The law of diminishing marginal utility is NOT a reason why the demand curve is downward sloping. The three main reasons for the downward slope of the demand curve are tastes/preferences, substitution effect, and income effect. The law of diminishing marginal utility explains how the additional value to a consumer decreases as more units of a product are consumed.


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