An increase in the price of a good
A)increases the quantity of the good demanded by a consumer.
B)decreases the total utility of the consumer.
C)changes the consumer's preferences.
D)increases the number of combinations of goods a consumer can purchase.
E)has no effect on the maximum combinations of goods the consumer can purchase.

Question

Quizplus · Accepted Answer

An increase in the price of a good reduces the purchasing power of the consumer, leading to a decrease in the total utility or satisfaction the consumer derives from the given level of consumption.

An Increase in the Price of a Good