A downward sloping demand curve can be derived for a normal product by increasing its price in the consumer-behaviour model and noting
Question
A downward sloping demand curve can be derived for a normal product by increasing its price in the consumer-behaviour model and noting
Solution
The statement seems to be incomplete, but I'll provide an explanation based on what you've given.
A downward sloping demand curve represents the inverse relationship between the price of a good and the quantity demanded, holding everything else constant. This is known as the law of demand. Here's how it can be derived in a consumer-behaviour model:
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Assume we have a normal product, which is a good that consumers demand more of as their income increases.
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Increase the price of this product. According to the law of demand, consumers will buy less of the product because it's now more expensive. This is because consumers have a limited budget, and when the price of one good rises, they will often substitute it for a cheaper alternative.
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Plot the price of the product on the y-axis of a graph and the quantity demanded on the x-axis.
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As you increase the price, note the corresponding decrease in quantity demanded.
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Connect these points to form a curve. This curve will slope downwards from left to right, illustrating the inverse relationship between price and quantity demanded.
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This downward sloping curve is the demand curve for the normal product.
Remember, this is a simplified explanation. In reality, many factors can affect demand, including changes in income, preferences, and the prices of other goods.
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