Category: Micro Economics

Why demand curve is downward sloping?

According to the law of demand, there is an inverse relationship between demand and price. It determines that the demand curve slopes downwards from left to right. The question arises why the demand curve slopes downwards or why the law of demand applies. Following are the reasons for it : ¬†Law of diminishing marginal utility: According …

Basic Competitive Models

Basic competitive models gives an answer of the control problems of an economy i.e., who makes the decision of what to produce, how to produce and for whom to produce. We know that, economics has been evolved and developed in the framework of a free market economy in which the resources of the society are owned …