State any two reasons for downward slope of the demand curve with two three lines explanation
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when the price of a commodity decreases its demand increases. The law of demand assumes that the other factors affecting the demand of a commodity remain the same.
Thus, the demand curve is downward sloping from left to right.
Causes of Downward Sloping of Demand Curve
Law of diminishing the marginal utility
Substitution effect
Income effect
New buyers
Old buyers
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KEY TAKEAWAYS
The law of demand says that at higher prices, buyers will demand less of an economic good.
The law of supply says that at higher prices, sellers will supply more of an economic good.
These two laws interact to determine the actual market prices and volume of goods that are traded on a market.
Several independent factors can affect the shape of market supply and demand,
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