The law of demand versus diminishing marginal utility
AbstractDiminishing 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. Copyright 2006, Oxford University Press.
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Bibliographic InfoPaper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 0959.
Length: 19 pages
Date of creation: 2005
Date of revision:
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Other versions of this item:
- Bruce R. Beattie & Jeffrey T. LaFrance, 2006. "The Law of Demand versus Diminishing Marginal Utility," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 263-271.
- Beattie, Bruce R. & LaFrance, Jeffrey T., 2006. "The Law of Demand Versus Diminishing Marginal Utility," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2ks565h0, Department of Agricultural & Resource Economics, UC Berkeley.
- Bettie, Bruce R. & Lafrance, Jeffrey T., 2006. "The law of demand versus diminishing marginal utility," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9c73m45q, Department of Agricultural & Resource Economics, UC Berkeley.
- Beattie, Bruce R. & LaFrance, Jeffrey T., 2005. "The law of demand versus diminishing marginal utility," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0dv2v8xx, Department of Agricultural & Resource Economics, UC Berkeley.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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