What is the law of demand from the cardinalist point of view?

Answer 1

From the cardinalist point of view, the law of demand asserts that as the price of a good decreases, the quantity demanded by consumers increases, and vice versa. This relationship is based on the concept of utility, where consumers derive satisfaction from goods. Lower prices enhance the perceived utility, leading to higher demand, while higher prices diminish utility, resulting in reduced demand. The law emphasizes measurable changes in utility as a function of price variations.