The Law of Demand Versus Diminishing Marginal Utility

Bruce R. Beattie and Jeffrey LaFrance ()

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: Diminishing 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 diminishing marginal utility. The examples are accompanied with the geometry and basic mathematics of the utility functions and the implied ordinary/Marshallian demands.

Keywords: Convex preferences; Diminishing marginal utility; Downward sloping (search for similar items in EconPapers)
Date: 2006-06-01
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The Law of Demand versus Diminishing Marginal Utility (2006)
Journal Article: The Law of Demand versus Diminishing Marginal Utility (2006)
Working Paper: The law of demand versus diminishing marginal utility (2006)
Working Paper: The Law of Demand Versus Diminishing Marginal Utility (2005)
Working Paper: The law of demand versus diminishing marginal utility (2005)
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