Yes, I agree with this statement.
Reasons justifying downwards sloping demand curve are as follows :
- The law of Diminishing Marginal Utility : Marginal utility goes on diminishing when there is increase in the stock of commodity and consumer tends to buy more when price falls and vice-versa.
- Income Effects : Whenever there is a fall in price of a commodity, purchasing power of a consumer gets increased, which enables him to buy more of that commodity.
- Substitution Effect : When price of commodity rises consumer tends to buy more of cheaper substitute goods and less of the commodity whose price has increased.
- Multi-purpose Uses : When a commodity can be used for satisfying multiple needs, its demand will rise with a fall in its price and vice-versa.
- New Consumers : When there is fall in price of a commodity, a new consumer class buy the commodity as they can afford it. Thus total demand for commodity increases with fall in price.
