This diagram shows hypothetical demand curves for individuals A and B.

The differences in their slopes suggest that consumer A and consumer B
A) have very different income levels.
B) have different tastes.
C) are not subject to the law of diminishing marginal utility.
D) are charged different prices for the same commodity.
E) are offered different amounts to purchase.

Question

This diagram shows hypothetical demand curves for individuals A and B.

The differences in their slopes suggest that consumer A and consumer B
A) have very different income levels. 
B) have different tastes. 
C) are not subject to the law of diminishing marginal utility. 
D) are charged different prices for the same commodity. 
E) are offered different amounts to purchase.

Quizplus · Accepted Answer

The different slopes of the demand curves suggest that the two consumers have different tastes. A steeper slope indicates that consumer A is more sensitive to changes in price and therefore values the good less than consumer B, who has a flatter demand curve indicating a higher willingness to pay. This indicates that the two individuals have different preferences and values regarding the commodity, which is a factor of individual taste.

This Diagram Shows Hypothetical Demand Curves for Individuals a and B