An individual's demand curve for a good is derived by
A)varying the income level and observing the resulting total utility derived from both goods
B)varying the price of one good and observing the resulting quantities demanded of the other good
C)varying the prices of both goods and observing the changes in quantities demanded of both goods
D)shifting the budget line to the left and calculating the loss in total utility
E)varying the price of one good and observing the resulting quantities demanded of that good

Question

Quizplus · Accepted Answer

An individual's demand curve for a good is derived by varying the price of that good and observing the resulting quantities demanded of that good. This is because the demand curve shows the relationship between the price of a good and the quantity of that good that consumers are willing and able to buy at each price, holding all other factors constant. Varying the price of the good allows us to observe how consumers' behavior changes in response to changes in price, and plot their demand curve accordingly.

An Individual's Demand Curve for a Good Is Derived by