The law of demand versus diminishing marginal utility
AbstractDiminishing marginal utility 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 diminishing marginal utility. The examples are accompanied with the geometry and basic mathematicsof the utility functions and the implied ordinary/Marshallian demands.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt0dv2v8xx.
Date of creation: 01 Sep 2005
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Life Sciences; Social and Behavioral Sciences; consumers' demand; economic analysis; expected utility theory;
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.
- Beattie, Bruce R. & LaFrance, Jeffrey T, 2005. "The law of demand versus diminishing marginal utility," CUDARE Working Paper Series 0959, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- 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.
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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