Describe how marginal utility and demand are related
Please provide the best answer for the statement.
Marginal utility helps explain the down sloping nature of the demand curve. Since additional units of consumption yield less and less utility, consumers will only consume additional units of a good if the price lowers. The consumer would rather spend additional dollars on another good with equal or greater utility, not diminishing utility. Put on a larger scale, this develops the idea that price has to lower for more quantity to be consumed, thus supporting the inverse relationship between price and quantity demanded.
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What is ‘market failure'? Explain one way in which government can help overcome such failure
What will be an ideal response?
Graphically, we can think of the marginal product of a factor as the:
A. additional inputs associated with producing one more unit of output. B. slope of the total production curve, when output is plotted against the quantity of the input that is used. C. slope of the total cost curve, when output is plotted against the costs of the quantity of the inputs used. D. additional cost associated with producing one more unit of output.
The costs borne by an individual victim of theft can diverge from the social costs if the
A. stolen items were destroyed by the thief. B. stolen items were covered by insurance. C. stolen items were priceless. D. all of the options are correct.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2. B. P3 and Y1. C. P2 and Y2. D. P2 and Y3.