Under the cardinal approach, what does the fall in your father’s satisfaction from each additional glass of juice imply for his demand curve for juice?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → He will buy an extra glass only at a lower price, so his demand curve slopes downward
Each extra glass gives your father less satisfaction than the one before. So he is willing to pay less for each extra glass, and he buys one more only if the price falls. This gives a downward sloping demand curve.
NCERT (2026-27): “Derivation of Demand Curve in the Case of a Single Commodity (Law of Diminishing Marginal Utility) … An explaination for a downward sloping demand curve rests on the notion of diminishing marginal utility. 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 and this results in a downward sloping demand curve. At a price of Rs. 40 per unit x, individual’s 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.” |