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How can the demand curve be derived using the marginal utility theory?

Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.


What happens to marginal utility when you move down on the demand curve?

as we move down on the demand curve, marginal utility of a commodity starts declining bcoz of the law of diminishing marginal utility.after getting full satisfaction from a commodity both demand and marginal utility of that commodity decreases.


Marginal productivity of labour and the demand for labour .?

Graphically illustrate and explain the relationship between marginal productivity of labour and the demand for labour .


What is the relationship between marginal utility and demand?

There is a close relationship between the marginal utility and price of a commodity.The additional satisfaction from the consumption of an additional unit of the commodity is called marginal utilty. Price means the value of the goods expressed in the terms of money.Price of all units of he same goods of consumption are more or less identical.It means that the consumer pays the same price for all the units of the same goods of consumption. But marginal utility of the goods of consumption start diminishing as the consumer increase the units of consumption of the commodity.Therefore the consumer will like to pay that price for the commodity,which is equal to the marginal utility he gets from the commodity.If the price of the commodity are higher than the marginal utility he derives from the commodity he will not like to purchase the commodity. In this way there is a clod\se relation between the marginal utility and the price of the commodity.


Relationship between Marginal revenue and Demand curve?

marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.

Related Questions

How can the demand curve be derived using the marginal utility theory?

Marginal utility is the key concept underline demand .The height of a demand curve reflects marginal utility.The marginal utility curve resembles the demand curve. So, it is through the marginal utility we get the demand curve.


What happens to marginal utility when you move down on the demand curve?

as we move down on the demand curve, marginal utility of a commodity starts declining bcoz of the law of diminishing marginal utility.after getting full satisfaction from a commodity both demand and marginal utility of that commodity decreases.


Marginal productivity of labour and the demand for labour .?

Graphically illustrate and explain the relationship between marginal productivity of labour and the demand for labour .


What is the relationship between marginal utility and demand?

There is a close relationship between the marginal utility and price of a commodity.The additional satisfaction from the consumption of an additional unit of the commodity is called marginal utilty. Price means the value of the goods expressed in the terms of money.Price of all units of he same goods of consumption are more or less identical.It means that the consumer pays the same price for all the units of the same goods of consumption. But marginal utility of the goods of consumption start diminishing as the consumer increase the units of consumption of the commodity.Therefore the consumer will like to pay that price for the commodity,which is equal to the marginal utility he gets from the commodity.If the price of the commodity are higher than the marginal utility he derives from the commodity he will not like to purchase the commodity. In this way there is a clod\se relation between the marginal utility and the price of the commodity.


How the slope of the demand curve can be explained by the principle of marginal utility?

The demand curve is negatively sloped because it is based on the principle of marginal utility and this utility decreases as consumption increases. The demand price which depends on the marginal utility of a good also declines as consumption increases, so quantity and price are inversely related, leading to the negative curve and the law of demand.


Relationship between Marginal revenue and Demand curve?

marginal revenue always lies behind the demand curve,and when demand increases marginal revenue also increases.demand curve is used to determine price of a commodity.


What is the relationship between price elasticity of demand and the monopolist's revenue?

marginal revenue is negative where demand is inelastic


How can one determine demand from a utility function?

To determine demand from a utility function, one can use the concept of marginal utility. By calculating the change in utility for each additional unit of a good consumed, one can determine the level of demand for that good. The point at which the marginal utility equals the price of the good represents the optimal level of consumption and therefore the demand for that good.


How does diminishing marginal utility affect demand?

Well diminishing marginal utility basically states that when a person constantly consumes the same product each time they will become less and less satisfied. So diminishing utility will cause a decrease in demand.


How does the principle of diminishing marginal utility explain the slope of the demand curve?

The principle of diminishing marginal utility explains the slope of the demand curve by letting us be able to see which direction the slope is in, which is always downward.


Intuitive derivation of individual demand curve using marginal utility?

how is a demand curve derived from individual demand curve ?


What is the difference between marginal utility and marginal benefit?

I think this is the answer, based off my textbook, "Microeconomics" by Zupan and Browning. Marginal benefit is the "...maximum amount the consumer would pay for an additional unit" of some good. The height of the demand curve can be interpreted as showing the marginal benefit of some good. Marginal utility is the amount that total utility rises when consumption increases by one unit. For example if total utility for one scoop of ice cream is 10 units and totality utility for the second scoop of ice cream is 15 units, marginal utility measures the difference, 5 units, between the two.