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Explain of the law of demand

Explain of the law of demand?

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a. Diminishing marginal utility:  The decrease in added satisfaction that results as one consumes additional units of a good or service, i.e., the second “Big Mac” yields less extra satisfaction (or utility) than the first.

b. Income effect: A lower price increases the purchasing power of money income enabling the consumer to buy more at lower price (or less at a higher price).

c. Substitution effect: A lower price gives an incentive to substitute the lower-priced good for now relatively higher-priced goods.

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