Abstract
Diminishing marginal utility (DMU) is neither necessary nor sufficient for downward-sloping demand. Yet, upper-division undergraduate and beginning graduate students often presume otherwise. This paper provides two simple counter-examples that can be used to help students understand that the Law of Demand does not depend on DMU. The examples are accompanied with the geometry and basic mathematics of the utility functions and the implied ordinary/Marshallian demands.
Original language | English (US) |
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Pages (from-to) | 262-271 |
Number of pages | 10 |
Journal | Review of Agricultural Economics |
Volume | 28 |
Issue number | 2 |
DOIs | |
State | Published - 2006 |
ASJC Scopus subject areas
- Agronomy and Crop Science
- Economics and Econometrics