Question : Assertion: The demand curve demonstrates the inverse relationship between a good's own price and the number of units sought.
Reason: According to the law of diminishing marginal utility, consuming more units leads to lower consumer satisfaction.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer:
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A)
Solution :
The rule of demand—the inverse relationship between prices and quantity demanded—is once again demonstrated by the downward slope of the demand curve.
It is due to the law of diminishing marginal utility
The law of diminishing marginal utility states that all else equal, as consumption increases, the marginal utility derived from each additional unit declines.
Hence a is the correct answer.
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