Suppose a Consumer Who Purchases Only Two Goods Is Making

question 67

Multiple Choice

Suppose a consumer who purchases only two goods is making a utility-maximizing choice and then the price of one of the goods decreases.What will happen?

• A)The consumer's purchasing power will increase.
• B)The consumer's total utility will increase.
• C)The consumer's money income will increase.
• D)both a and b
• E)all of the above

---

Definitions:

Monopolistic Competition

A market structure characterized by many firms offering products that are similar but not identical, leading to competition on factors other than price.

Industry Entry

The process of a new company or business beginning operations in a particular market or industry.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of an enterprise.

Demand Schedule

A table that lists the quantity of a good that consumers are willing and able to purchase at various prices.