Law of Demand and Consumer Behavior
📌 The law of demand states that consumers buy more of a good when its price decreases, causing the demand curve to slope downward.
🧠 Consumer decisions are rooted in the theory of consumer behavior, aiming to maximize satisfaction, which economists term utility.
📊 Utility is measured using an imaginary scale called utils (ranging from 0 to 10) because satisfaction is subjective.

Law of Diminishing Marginal Utility
💡 The law of diminishing marginal utility dictates that consuming more units of a product leads to less extra satisfaction from each subsequent unit.
🍕 For example, the first slice of pizza offers high satisfaction, while the thrill diminishes significantly by the third slice.
➕ Marginal utility is the extra satisfaction gained from consuming one additional unit.
💯 Total utility is the overall satisfaction derived from consuming all units of a product.

Connecting Concepts
📉 The law of demand is explained by consumer behavior: people purchase more when the price drops because each unit spent yields greater relative satisfaction.
📖 Diminishing marginal utility explains why consumers won't continue buying indefinitely, as the benefit (satisfaction) decreases with each addition.

Key Points & Insights
➡️ Understand the law of demand: lower prices drive higher purchase quantities.
➡️ Recognize diminishing marginal utility: subsequent units of a consumed good provide less additional satisfaction (marginal utility).
➡️ Utility is the foundational concept in consumer decision-making, measured in hypothetical utils.

📸 Video summarized with SummaryTube.com on Oct 06, 2025, 07:40 UTC