Declining Marginal Propensity to Consume Means

question 41

Multiple Choice

Declining marginal propensity to consume means

• A)as income increases,spending increases proportionately.
• B)as income increases,a smaller percentage is spent on consumer goods.
• C)as income increases,a larger percentage is spent on consumer goods.
• D)as income decreases,spending remains constant as a percentage of income.

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Definitions:

Demand (D)

A consumer's desire and willingness to pay a price for a specific good or service, holding all other factors constant.

Marginal Revenue (MR)

Marginal Revenue is the additional income that is obtained from selling one more unit of a good or service.

Pure Monopolist

A market structure wherein a single company or entity has exclusive control over the production and sale of a particular product or service, with no close substitutes.

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a product.