What factors lead to a downward sloping demand curve?

Answer 1

The Law of Demand states that the demand curve is downward sloping. More formally, it states that all else constant:

1. A rise in the price of a good or service will result in a decrease in the quantity demanded;
2. A decrease in the price of a good or service will result in an increase in the quantity demanded.

This means that as price goes up the quantity demanded will always go down. 

The Law of Demand explains what happens as we move along the demand curve. However, it doesn't provide an explanation for why the Law of Demand holds: 

1.   When purchases of a good or service increase, each additional unit of the good or service will yield less additional satisfaction than given by the previous unit ‑ this phenomena is known as diminishing marginal utility.

2.   When the price of a product falls, we can afford to purchase more ‑ our real income has increased ‑ and when the price of a product rises, we cannot afford to purchase as much ‑ our real income has decreased ‑ this is called the income effect.

3. When the price of a product falls, we will use it for more purposes (in place of other goods) and when the price of a product rises, we will find we can do without it for some purposes (and will turn to other goods). This is called the substitution effect.

Answer 2

In short: The Law of Demand

The law of demand states that, as the price of a good increases, consumers will want to buy less of it. Imagine if the best laptop in the world cost $10, wouldn't you want to buy it? Everyone would! What if it cost $100,000? Very few people, if any, would want to buy it. The only exception to this rule is a theoretical "giffen good", where more is demanded as the price goes up, but I've yet to hear a good argument for their existence.