Figure 21-9

-Refer to Figure 21-9.Assume that the consumer depicted the figure has an income of $50.Which of the following price-quantity combinations would be on her demand curve for marshmallows if the price of chocolate chips is $2.50?
A)$2.50, 6
B)$2.50, 10
C)$5.00, 3
D)$5.00, 5

Question

Figure 21-9
 
-Refer to Figure 21-9.Assume that the consumer depicted the figure has an income of $50.Which of the following price-quantity combinations would be on her demand curve for marshmallows if the price of chocolate chips is $2.50?
A)$2.50, 6 
B)$2.50, 10 
C)$5.00, 3 
D)$5.00, 5

Quizplus · Accepted Answer

At a price of $2.50 for chocolate chips, the consumer's budget line intersects the quantity demanded of marshmallows at 10. However, the highest point on the budget line that also intersects the demand curve for marshmallows is at a quantity of 6 marshmallows, which would be the optimal choice for the consumer. Therefore, the price-quantity combination on the demand curve for marshmallows at a price of $2.50 would be ($2.50, 6). Option B is the only one that includes this combination.

Figure 21-9 -Refer to Figure 21-9.Assume That the Consumer Depicted the Figure