A Price Increase Causes a Consumer's "Real" Income To

question 88

Multiple Choice

A price increase causes a consumer's "real" income to:

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) decrease or increase depending on the size of the price change.

---

Definitions:

Marginal Revenue

The additional income from selling one more unit of a good; sometimes equal to price.

Marginal Cost

The extra charge incurred when making one more unit of a good or service.

Marginal Revenue

The additional income received from selling one more unit of a product.

Marginal Cost

The additional financial outlay required for producing another unit of a product or service.