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Diminishing marginal utility is indicated by the downward slope of which of the...

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miguel-elmes | Student, Undergraduate | eNoter

Posted December 9, 2010 at 9:46 PM via web

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Diminishing marginal utility is indicated by the downward slope of which of the following:

A. Supply curve

B. Demand Curve

C. Elastic Supply Curve

D. Elastic demand curve

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted December 9, 2010 at 10:13 PM (Answer #1)

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Marginal utility in the field of economics refers to the extra value that each subsequent unit of a product is able to provide to the consumer.

A decreasing marginal utility means that as consumers get more of a product each subsequent unit provides a lesser value to them than the previous unit. This is the primary reason why the price has to decrease in order to increase the number of units of a product purchased by consumers.

So the demand curve which is the graph of price of the product by quantity demanded is a downward sloping curve due to the diminishing marginal utility.

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