Reasons for the Slope of the Demand Curve

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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.

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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.

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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.

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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.

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About Ralph Nyadzi

Ralph is a professional blogger, founder and CEO of RN Digital Media Ent. He spends his day working as an online entrepreneur, e-learning strategist and a test prep coach. If you can't locate him anywhere on the web, just doing what he knows how to do best, check him out on his farm or in the kitchen. He lives with four cats in the Central Region of his native country, Ghana.

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