When a Consumer Shifts Purchases from Product X to Product

question 10

Multiple Choice

When a consumer shifts purchases from product X to product Y, the marginal utility of

• A)X falls and the marginal utility of Y rises.
• B)X rises and the marginal utility of Y falls.
• C)both X and Y rises.
• D)both X and Y falls.

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Definitions:

Monopolist

A monopolist is a market participant that has exclusive control over the supply of a particular good or service, setting prices without competition.

Competitive Market

A market structure characterized by many buyers and sellers, where no single entity can influence the price or quantity of the product.

Interest Rate

The fraction of a loan subjected to interest charges for the borrower, conventionally expressed as a yearly percentage of the unpaid loan sum.

Rare Bottle

Refers to a bottle of unusual, scarce, or limited production, often sought after by collectors due to its uniqueness or historic value.