Answer :
Final Answer:
The reason the demand curve for potatoes is downward sloping has mostly to do with Diminishing marginal utility. Thus the correct option is (C).
Explanation:
Diminishing marginal utility is the primary reason for the downward-sloping demand curve for potatoes. This economic concept states that as individuals consume more units of a good, the additional satisfaction, or utility, derived from each additional unit decreases. Let's delve into this with a brief explanation.
When an individual receives $20 and heads to the store to buy potatoes, they will start by purchasing the units that provide the most satisfaction. The first few potatoes are highly valued because they can be used for various purposes, such as making French fries, mashed potatoes, or potato salad. As they continue to buy more potatoes, the additional utility derived from each potato diminishes. They may have enough for their immediate needs, and any further potatoes may not be as beneficial.
This decreasing satisfaction with each additional potato purchase leads to a reduction in the quantity demanded as the price remains constant. In economic terms, this is why the demand curve for potatoes slopes downward, demonstrating the inverse relationship between price and quantity demanded.
In mathematical terms, if we were to graph the demand for potatoes, we'd see a negatively sloping curve. The initial few potatoes provide higher utility, but as the quantity increases, the marginal utility declines. This illustrates the fundamental principle of diminishing marginal utility, which plays a key role in shaping the demand curve for potatoes.
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