Read the following statements - Assertion (A) and Reason (R):
Assertion(A): There is a negative relationship between price of a commodity and quantity demanded, which is referred to as the Law of Demand.
Reason (R): Law of Diminishing Marginal Utility is the only factor that explains why demand curve is downward sloping.
From the given alternatives choose the correct one:

Assertion (A) is true but Reason (R) is false.

The correct option is Option3: Assertion (A) is true but Reason (R) is false.

Assertion(A): There is a negative relationship between price of a commodity and quantity demanded, which is referred to as the Law of Demand.  This is correct. The Law of Demand is a fundamental principle in economics. It states that as the price of a good or service increases, the quantity demanded by consumers will decrease, all other factors remaining constant. This means there's a negative relationship between price and quantity demanded.
Reason(R): Law of Diminishing Marginal Utility is the only factor that explains why demand curve is downward sloping.This is incorrect. The law of diminishing marginal utility states that each successive unit of a commodity provides lower marginal utility. Therefore, the individual will not be willing to pay as much for each additional unit as he paid for the previous unit and this results in a downward sloping demand curve. At a price of Rs. 40 per unit x, individuals demand for x was 5 units. The 6th unit of commodity x will be worth less than the 5th unit. The individual will be willing to buy the 6th unit only when the price drops below Rs. 40 per unit. Hence, the law of diminishing marginal utility explains why demand curves have a negative slope.

• However, the Law of Diminishing Marginal Utility (DMU) is only one explanation for why demand curves slope downward, but not the only explanation.
• Other factors also contribute to the downward slope of the demand curve, such as:
  • Income effect: When prices drop, consumers have more real income to spend.
  • Substitution effect: Consumers switch to cheaper alternatives.

Since DMU alone does not fully explain the Law of Demand, Reason (R) is not the sole or direct explanation for Assertion (A).