Refer to the Data for a Consumer Whose Income =

question 80

Multiple Choice

Refer to the data for a consumer whose income = $8. Suppose the price of new product Z is $2 rather than $1. This consumer would purchase

• A)none of Z.
• B)some of Z but less than at a price of $1.
• C)less of X, Y, and Z than if the price were $1.
• D)more of X, Y, and Z than if the price were $1.

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Definitions:

Marginal Revenue Curve

A graphical representation showing how much additional revenue a firm will make from selling one more unit of a product or service.

Relatively Elastic

Refers to a scenario in which the demand or supply for a product or service greatly alters due to variations in its price.

Marginal Revenue

The extra revenue produced by the sale of an additional unit of a product or service.

Relatively Elastic

A characteristic of a good or service with a demand that is sensitive to changes in price, meaning that small changes in price lead to larger changes in quantity demanded.