What is interesting here is we can see the mathematical relationship between total utility and marginal utility. The slope of the total utility curve is marginal utility. We will see that marginal of anything is always the slope of the total curve we happen to be talking about. So whenever you use the marginal concept it is simply a slope of something and can be interpreted as the change in the vertical axis divided by the change in the horizontal axis. How does the law of diminishing marginal utility explain the demand curve.
Demand is inelastic.
A decline in price will only cause a small increase in quantity demanded because utility has declined by so much consumers would not want to buy that much of a good whose utility is falling so fast. Thus the numerator of the elasticity formula is smaller than the denominator. It is elastic. A decline in price will cause consumers to by a larger amount of the good because the reduction of utility is so small. We will now explain the law of demand in more detail using the concept of diminishing marginal utility.