Question 43
MediumOriginal questionA consumer's marginal utility from good X, measured in rupees, is:
| Unit of good X | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| MU (in ₹) | 30 | 25 | 20 | 15 | 10 |
If the price of X falls from ₹20 to ₹10, how does the quantity bought change?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
At ₹20 he stops where MU = 20: the 3rd unit.
At ₹10 he goes on to the 5th unit, where MU = 10. A lower price, a larger quantity: the law of demand.
- Concept
- Deriving demand from MU
- Typical timeTypical
- 70 s
- Your timeYours
- —
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