Q.Why a demand curve has a negative slope or downward slope?

The demand curve is downward-sloping because quantity demanded moves inversely with price (law of demand). The main reasons are: the law of diminishing marginal utility, the income effect, the substitution effect, entry of new consumers at lower prices, and the different uses of a commodity. ## Meaning The demand curve shows the relationship between the price of a good and the quantity demanded. It slopes downward from left to right, meaning that as price falls quantity demanded rises, and as price rises quantity demanded falls — an inverse (negative) relationship between price and quantity. This follows the law of demand. ## Reasons for the negative slope 1. Law of diminishing marginal utility: as a consumer buys more units of a good, the marginal utility of each extra unit falls. He will therefore buy more only if the price is lower, so that price matches the falling utility. This is the basic cause of the downward slope. 2. Income effect: when the price of a good falls, the real income (purchasing power) of the consumer rises; he can now buy more of the good with the same money, so quantity demanded increases. 3. Substitution effect: when the price of a good falls, it becomes cheaper relative to its substitutes; consumers substitute this cheaper good for the dearer ones, raising its demand. 4. Arrival of new consumers: a fall in price brings the good within the reach of new (poorer) buyers who could not afford it earlier, increasing total demand. 5. Different uses of a commodity: a good with several uses (such as electricity or milk) is put to more uses when its price falls and to fewer, more important uses when its price rises, so demand exp …