why does the demand curve have a negative slope of downward sloping?
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The demand curve generally slopes downward from left to right. It has a negative slope because the two important variables price and quantity work in opposite direction. ... Thus a decrease in price brings about an increase, in demand. The demand curve, therefore, is downward sloping.
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The demand curve is downward sloping, indicating the negative relationship between the price of a product and the quantity demanded. For normal goods, a change in price will be reflected as a move along the demand curve while a non-price change will result in a shift of the demand curve.
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if yield curves are downward sloping, then short-term interest rates are expected to fall by so much that even when the positive term premium is added, long-term rates fall below short-term rates. You just studied 20 terms!
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The law of demand states that as the price of a good decreases, the quantity demanded of that good increases. In other words, the law of demand states that the demand curve, as a function of price and quantity, is always downward sloping.
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Unlike under perfect competition, a firm under imperfect competition such as under monopoly can sell more only by lowering its price. Therefore, the average revenue curve is downward sloping and its corresponding marginal revenue curve lies below it.
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The marginal revenue product curve indicates how marginal revenue product is related to the quantity of a variable input used in production. ... From the third worker on, the marginal revenue product declines, as each added worker contributes less to total revenue than previous workers. This is seen as a negative slope.
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The LM curve does not shift, the economy moves along the LM curve. When taxes increase: Consumption goes down, leading to a decrease in output/income. The decrease in income reduces the demand for money.
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When price is less than average total cost, firms are making a loss. Over the long-run, if firms in a perfectly competitive market are earning negative economic profits, more firms will leave the market, which will shift the supply curve left.
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The money demand curve has a  negative slope because an increase in the interest rate decreases the quantity of money demanded. ... An increase in the interest rate causes  a movement up along the money demand curve.
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The slope of the indifference curve is called the marginal rate of substitution , which declines as the quantity of X increases relative to the quantity of Y. Of course, the amounts of commodities X and Y that the individual will be able to consume depends on the level of that person's income.
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It slopes downward because of the wealth effect on consumption, the interest rate effect on investment, and the international trade effect on net exports. The aggregate demand curve shifts when the quantity of real GDP demanded at each price level changes.
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But unlike the law of demand, the supply relationship shows an upward slope. This means that the higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at a higher price increases revenue.
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Because consumers are willing to pay for a unit of good is directly related to the utility derived from consuming said unit, The Law of Diminishing Marginal Utility implies that the consumer's Marginal Benefit, and thus the demand curve's height, falls as the quantity consumed rises.
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In general sense,the relationship between interest rate and money demand is inverse or negative.
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The market demand curve is made up of all the individual demand curves for a good. In general, the higher the price of an item, the less an individual consumer will buy.
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The slope of this total utility curve is marginal utility. The shape of the total utility curve means that marginal utility is high for small quantities, declines, then becomes negative as the quantity consumed increases.
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In economic theory, price relates to demand in a function called the demand curve. The demand curve function assumes that the quantity consumers demand varies with price along a downward slope -- as prices increase, the consumer demand quantity falls. When prices decline, the consumer demand quantity increases.