Along a Downward-Sloping Linear Demand Curve

question 280

Multiple Choice

Along a downward-sloping linear demand curve

• A)the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities increase.
• B)the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities remain constant.
• C)the marginal utility from the consumption of each unit of the good falls and the total utility from consuming larger quantities increases.
• D)the marginal utility from the consumption of each unit of the good rises and the total utility from consuming larger quantities remain constant.

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Definitions:

Price to Clear

Price to Clear is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded, thereby clearing the market.

Profit Per Unit

The revenue obtained per unit of a product or service sold, minus the cost per unit.

Optimal Output

The level of production that generates the highest possible profit for a firm, taking into account costs and revenue.

Price to Clear

The market price at which the quantity supplied of a good matches the quantity demanded, leading to an equilibrium where there is no surplus or shortage.