Final answer:
The law of diminishing marginal utility explains why the demand curve for a given product slopes downward.
Step-by-step explanation:
The law of diminishing marginal utility explains why the demand curve for a given product slopes downward.
As additional units of a product are consumed, the marginal utility or additional satisfaction derived from each unit decreases.
This means that each subsequent unit provides less additional utility than the previous unit. As a result, consumers are willing to pay a lower price for additional units, leading to a downward-sloping demand curve.
For example, if a consumer buys one chocolate bar, the marginal utility of consuming that first bar might be very high.
However, as the consumer continues to consume more chocolate bars, the additional satisfaction or utility derived from each additional bar decreases. This is why the demand curve slopes downward.