Given a typical demand curve and a decline in price, the consumer who wishes to maximize total utility must increase the quantity purchased of a good to arrive at an optimal MU = P point.

Question

Quizplus · Accepted Answer

This statement is true according to the law of demand and the concept of maximizing total utility. As prices decrease, consumers are willing to purchase more of a good or service, as long as the marginal utility (MU) they receive from each additional unit consumed is greater than or equal to the price (P) they pay. Therefore, in order to reach an optimal MU = P point, the consumer must increase the quantity purchased.

Given a Typical Demand Curve and a Decline in Price