Based on the following graph,one point on the consumer's demand curve for X is The consumer's income is $600.
A)60 units at a price of $10.
B)35 units at a price of $10.
C)35 units at a price of $6.
D)25 units at a price of $10.
E)25 units at a price of $7.50.

Question

Based on the following graph,one point on the consumer's demand curve for X is  The consumer's income is $600.
A)60 units at a price of $10. 
B)35 units at a price of $10. 
C)35 units at a price of $6. 
D)25 units at a price of $10. 
E)25 units at a price of $7.50.

Quizplus · Accepted Answer

The point on the demand curve indicates that at a price of $10, the consumer is willing and able to buy 25 units of X. Since the consumer's income is $600, we can use the slope of the demand curve to find the other possible combinations of price and quantity that the consumer can afford. The slope of the demand curve is -15, which means that for every $1 increase in price, the consumer's quantity demanded decreases by 15 units. Therefore, the consumer can also afford to buy 60-25=35 units at a price of $6, since $10-$6=$4 and the consumer's income can accommodate a $60 decrease in spending (15 units decrease for each dollar increase in price multiplied by the $4 decrease in price). However, since the question is asking for the best choice, we choose the option with the highest price and quantity combination that the consumer can afford, which is D: 25 units at a price of $10.

Based on the Following Graph,one Point on the Consumer's Demand