October 30, 2020

Reasons for the Slope of the Demand Curve

Reading Time: 2 minutes

This brief tutorial on Senior High School Economics or WASSCE Economics serves as a quick reminder about the various factors that determine the slope of the demand curve.

DISCLOSURE: This post may contain affiliate links from which I will earn a commission. READ FULL DISCLOSURE.

I will give you the key points you need to answer both objective and essay questions in Economics.

It is all about the reasons for the slope of the normal demand curve as well as the abnormal curves.

Without wasting much time, let’s move to our first frequently asked WASSCE Economics question about the slope of this particular curve.

1. Why the Demand Curve slopes downwards from left to right

As you may know, the normal Demand Curve is negatively sloped. 

What this means is that more of a commodity is bought at a lower price and less is bought at a higher price.

In other words, the price of a commodity is inversely related to quantity demanded of that commodity.

Find below the reasons for this behaviour of demand and, for that matter, the normal demand curve.

These three points are just here to give you a quick reminder. You will need to study, understand and explain each one thoroughly in your Economics essay.

1. Income Effect

2. Substitution Effect

3. The Marginal Utility Approach (That is, the law of diminishing marginal utility)

Let’s now look at the reasons for the various slopes of the abnormal demand curve.

2. Factors accounting for the positively-sloped curve

In some rare cases, you can have an abnormal curve for demand which is positively sloped.

What this means is that the quantity demanded of a commodity tends to increase as price increases and falls as price falls.

In this scenario, therefore, demand begins to behave like a normal supply situation.

Here are the points you can explain to answer WASSCE Economics questions that are based on the slope of this abnormal demand curve.

1. Fear of future or further rise in price.

2. Conspicuous consumption or “snob” appeal. Goods of ostentation or Veblen goods are in this category.

3. Giffen goods or “inferior” goods.

Recommended for You:

How to Study for WASSCE Successfully Online

76 Likely Questions for WASSCE Economics

3. Reasons for the vertically-sloped demand curve

This is also known as a zero elasticity of demand or perfectly inelastic demand curve.

Below are the reasons why consumers’ demand for a commodity is almost unaffected by any change in price.

1. Necessities or highly essential goods

2. Cheap commodities. This is because the portion of consumer’s income that goes into buying them is very small.

3. Habit or very strong taste

4. Reasons for the horizontally-sloped curve

This refers to an infinitely elastic or perfectly elastic demand.

In this case, consumers are wiling to purchase the commodity in any quantities at a particular price.

A slight increase in the existing price, for example, could cause demand for commodity to collapse.

The main reasons for perfectly elastic demand are about the type of commodity in question.

1. Highly luxurious goods with numerous substitutes.

2. Expensive goods. These are goods on which consumers spend a large proportion of their income.

3. Goods with fixed prices

So, now you know. I wish you good luck in both your High School Economics objective test and your Economics essay paper.

BEFORE YOU FORGET: Share this post on your favourite social media platform by clicking on one or more icons below. Many thanks.

Photo by Sergio Roberto Bichara from FreeImages

Ralph Nyadzi

Ralph has a passion for the teaching and learning of Language and Literature mainly because these two help him to understand and appreciate why people act the way they do. Over the past two decades, he has coached over 5000 students and adult learners to achieve their educational goals. Ralph is the founder and CEO of Cegast Academy.

View all posts by Ralph Nyadzi →

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign up to have personalized learning/teaching tips, tools & tricks delivered into your inbox.