Question : Because of the following, an individual demand curve slopes downward to the right: A: The application of the law of diminishing marginal utility B: The substitution effect of a price decrease C: Income impact of price decrease
Option 1: Only A correct
Option 2: Only B correct
Option 3: Only B and C correct
Option 4: A, B and C all are correct
Correct Answer: A, B and C all are correct
Solution : If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to increase. Raising prices will always cause total revenue to increase. Hence d is the correct answer
Question : What is the name of the law that causes the demand curve to slope downward?
Question : What is the First Law of Gossen?
Question : Law of Demand violations include:
Question : The law of diminishing marginal utility states that:
Question : According to the law of diminishing marginal utility, as a consumer consumes more of a good:
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