downward-sloping demand curve

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A demand curve showing that the quantity demanded decreases as price increases. Demand curves are normally assumed to slope downwards, which is consistent with the outcome of empirical demand studies. This is not a logical necessity: it is theoretically possible for Giffen goods to exist. Such goods have a positive income effect that more than offsets the negative substitution effect of a price rise, so producing an upward-sloping demand curve. See also law of demand.

Subjects: Economics.

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