Which of the following contribute to the downward slope of a

Which of the following contribute to the downward slope of a demand curve?

Income and substitution effects.

The cross elasticities of alternating indifference curves.

Decreasing marginal utility of consumption.

A & C

Solution

D. A & C

Explaination:

Downward slope of demand curve means decline in prices will lead to higher demand.

Income effect : It means when there is decline in price of the product, that means the consumer can buy more of that product with the same amount of income, so decline in prices will lead to increase in quantity demand.

Substutution effect:  It means when there is decline in price of the product, that means it has become relatively cheaper as compared to its substitutes , thus the demand for that product will increase.

Decreasing marginal utility of consumption: refers to satisfication derived from each additional unit reduces as the person consumes more that makes it to pay less for additional units.