Marginal utility analysis and indifference curve analysis are both used to
A) derive supply curves.
B) analyze total revenue.
C) derive demand curves.
D) compute opportunity cost.

Question

Quizplus · Accepted Answer

Marginal utility analysis and indifference curve analysis are both used to derive demand curves. Marginal utility analysis explains how the utility or satisfaction derived from consuming additional units of a good decreases, leading to a downward-sloping demand curve. Indifference curve analysis, on the other hand, shows combinations of goods that provide the same level of satisfaction to consumers, helping to explain their choices and the resulting demand curve.

Marginal Utility Analysis and Indifference Curve Analysis Are Both Used