Suppose you have one point on a demand curve.To plot another point for this demand curve using a group of indifference curves,
A) transfer all points from the indifference curve to the corresponding demand curve.
B) horizontally sum the indifference curves.
C) change the price of a good, rotate the budget line, and find the new best affordable point. This new price and quantity is another point on the demand curve.
D) calculate the marginal rates of substitution from the indifference curve and transfer these values to the demand curve.
E) transfer the budget line so that it becomes the demand curve.

Question

Quizplus · Accepted Answer

To plot another point on the demand curve using a group of indifference curves, we need to change the price of a good, rotate the budget line, and find the new best affordable point. This new price and quantity is another point on the demand curve. This is because the demand curve shows the relationship between the price of a good and the quantity demanded, and changing the price will result in a movement along the demand curve. The budget line represents the different combinations of goods that a consumer can afford given their income and the prices of goods, and the best affordable point on the budget line represents the combination of goods that maximizes consumer utility. By rotating the budget line, we can find a new best affordable point which represents another point on the demand curve.

Suppose You Have One Point on a Demand Curve