Asked by Jibreel Ahmad on Apr 25, 2024
Verified
A downward-sloping demand curve can be derived for a normal product by increasing its price in the consumer-behavior model and noting
A) the increase in the utility-maximizing quantity of that product demanded.
B) the decrease in the utility-maximizing quantity of that product demanded.
C) a substitution effect that encourages more consumption of that product.
D) an income effect that encourages more consumption of that product.
Utility-maximizing
The economic principle whereby consumers adjust their consumption of goods and services to achieve the highest level of satisfaction or utility.
Downward-sloping
Downward-sloping describes a curve or line on a graph that exhibits a decline from left to right, often used to illustrate decreasing prices or quantities in economics.
Demand Curve
A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices, typically downward sloping.
- Understand the effect of price fluctuations on the demand quantity as influenced by the principle of diminishing marginal utility.
Verified Answer
Learning Objectives
- Understand the effect of price fluctuations on the demand quantity as influenced by the principle of diminishing marginal utility.
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