When a consumer's optimal consumption choice is a corner equilibrium it implies:
A)the consumer has highly diversified preferences.
B)the goods are economic "neuters".
C)consumers spend all of their income on one good.
D)the goods are pure complements.

Question

Quizplus · Accepted Answer

In a corner equilibrium, a consumer allocates all of their budget to purchase only one of the available goods, indicating a strong preference for that good over others, rather than a diversified preference or the goods being complements or "neuters".

When a Consumer's Optimal Consumption Choice Is a Corner Equilibrium