Figure 7-2 Figure 7-2 Represents the Demand for Ice Cream

question 95

Multiple Choice

Figure 7-2
Figure 7-2 represents the demand for ice cream cones.
-Refer to Figure 7-2.When the price of ice cream cones increases from $2 to $3,quantity demanded decreases from 4 ice cream cones to 3 ice cream cones.This change in quantity demanded is due to

• A) the price and output effects.
• B) the income and substitution effects.
• C) the law of diminishing marginal utility.
• D) the fact that marginal willingness to pay falls.

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Definitions:

Demand

The quantity of a particular good or service that consumers are willing and able to purchase at various prices during a given period of time.

Negatively Sloped

Describes a line or curve on a graph that moves downwards as it moves from left to right, indicating an inverse relationship between two variables.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from the production and consumption of goods or services.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices over a given period of time.