The price of a good that Mark is currently consuming has increased. As a result
A) Mark will experience a shift in the demand curve of the good whose price has increased.
B) Mark will experience an increase in total utility.
C) Mark's purchasing power has decreased.
D) Mark will stop consuming the good.

Question

Quizplus · Accepted Answer

An increase in the price of a good that Mark is consuming means that for the same amount of money, he can now buy less of this good or others, effectively reducing his purchasing power. The other options do not necessarily follow from a price increase. Demand curves shift due to changes in factors other than the price of the good itself (like income or preferences), total utility does not automatically increase with a price increase, and there's no certainty that Mark will stop consuming the good altogether—he may just consume less of it.

The Price of a Good That Mark Is Currently Consuming