A person is in consumer equilibrium, and then the price rises for one of the goods she purchases. If she wants to restore herself to consumer equilibrium, she will (most likely)
A)buy less of the good whose price has risen and more of the relatively lower priced goods.
B)try to increase the marginal utility she receives from the good whose price has risen.
C)try to decrease the marginal utility she receives from the goods whose prices did not rise.
D)buy more of both the good whose price has risen and of the goods whose prices have not risen.
E)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

When the price of a good rises, a consumer in equilibrium will buy less of that good and more of other goods that are now relatively cheaper, to maximize utility within their budget constraint. This is a direct application of the substitution effect.

A Person Is in Consumer Equilibrium, and Then the Price