A downward-sloping demand curve can be derived for a normal product by increasing its price in the consumer-behavior model and noting
A)the increase in the utility-maximizing quantity of that product demanded.
B)the decrease in the utility-maximizing quantity of that product demanded.
C)a substitution effect that encourages more consumption of that product.
D)an income effect that encourages more consumption of that product.

Question

Quizplus · Accepted Answer

When the price of a normal product increases, the utility-maximizing quantity of that product demanded decreases, reflecting the downward slope of the demand curve. This is because consumers will buy less of the product as it becomes more expensive, assuming their preferences and income remain constant.

A Downward-Sloping Demand Curve Can Be Derived for a Normal