In order to represent the inverse relationship between price and demand, the demand curve must slope downwards. Apart from this basic reason, there are many other factors which make the demand curve to slope downwards. 

They are as follows:

(a) Operation of the law of Diminishing Marginal Utility: The law of DMU states that as the consumer acquires larger quantities of any commodity, the additional units of the same product will give him lower utility, and as such he gets a less value for the additional under The law of demand states that in order to induce the consumer to buy more less price must be offered.

(b) Operation of the law of Equi – Marginal Utility: This law states that utility of the product must be equal to its price in general. As price falls, the equality between the two will be disturbed and in order to re-establish this equality the consumer buys more. Now utility comes to the level of reduced price. Hence, as price falls, a consumer buys more.

(c) Income effect: A change in demand as a result of change in income is called as Income effect. As price falls, the real income of the consumer increases. With this increased real income (gets more purchasing power with more money in his hands), he buys more.

(d) Substitution effect: When the price of one product falls, it becomes cheaper when compared to other products ’ for which price remains constant. Hence, a consumer will substitute low priced product to high priced product. The result is that demand for a product rises as price falls.

(e) Price Effect: When the change in quantities demanded is caused by the change in price, it is called as Price effect. When the price of a product falls, it becomes cheaper and consumer buys more of that and vice versa. Hence, the demand curve always slopes downwards from left to right.