Show, using utility theory, why a consumer who is initially maximizing her utility will alter her consumption pattern in response to a change in the price of a good
If marginal utilities per dollar are initially equal across all goods, a fall in the price of one will raise the marginal utility per dollar consumed on that good. She can increase total utility by allocating more dollars toward that good.
Economics
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When a consumer's willingness to buy a good or service is influenced by the number of people who have purchased that good or service, this is called
A) a switching cost. B) an opportunity cost. C) a network effect. D) an advertising gimmick.
Economics
Explain why the demand for food is inelastic in terms of the substitution effect and diminishing returns
What will be an ideal response?
Economics