Derive the law of demand from the single commodity equilibrium condition ''Marginal utility = Price''. OR Derive the inverse relation between price of a good and its demand from the single commodity equilibrium condition 'Marginal utility = Price'.

Derive the law of demand from the single commodity equilibrium conditi

1.	Derive the law of demand from the single commodity equilibrium condition ''Marginal utility = Price''. OR Derive the inverse relation between price of a good and its demand from the single commodity equilibrium condition 'Marginal utility = Price'.
Answer» <html><body><p></p>Solution :According to single commodity equilibrium condition, consumer purchases that <a href="https://interviewquestions.tuteehub.com/tag/much-2164829" style="font-weight:bold;" target="_blank" title="Click to know more about MUCH">MUCH</a> quantity of a good at which marginal utility (MU) is <a href="https://interviewquestions.tuteehub.com/tag/equal-446400" style="font-weight:bold;" target="_blank" title="Click to know more about EQUAL">EQUAL</a> to price. Given, MU = price. Now suppose, price falls. It will make MU <a href="https://interviewquestions.tuteehub.com/tag/greater-476627" style="font-weight:bold;" target="_blank" title="Click to know more about GREATER">GREATER</a> than the price and will encourage the consumer to <a href="https://interviewquestions.tuteehub.com/tag/buy-391430" style="font-weight:bold;" target="_blank" title="Click to know more about BUY">BUY</a> more. It shows that when price falls demand <a href="https://interviewquestions.tuteehub.com/tag/rises-1189694" style="font-weight:bold;" target="_blank" title="Click to know more about RISES">RISES</a>.</body></html>