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The law of demand versus diminishing marginal utility

Bruce R. Bettie 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 presumeotherwise. This paper provides two simple counter-examples that can be used to help students understand that the Law of Demand does not depend on DMU. The examples are accompaniedwith the geometry and basic mathematics of the utility functions and the implied ordinary/Marshallian demands.

Keywords: Life Sciences; Social and Behavioral Sciences; consumers' demand; economic analysis; expected utility theory (search for similar items in EconPapers)
Date: 2006-07-01
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Related works:
Journal Article: The Law of Demand versus Diminishing Marginal Utility (2006) Downloads
Journal Article: The Law of Demand versus Diminishing Marginal Utility (2006) Downloads
Working Paper: The Law of Demand Versus Diminishing Marginal Utility (2006) Downloads
Working Paper: The Law of Demand Versus Diminishing Marginal Utility (2005) Downloads
Working Paper: The law of demand versus diminishing marginal utility (2005) Downloads
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