An individual's demand curve for X
A) shows how the utility-maximizing choice of X changes as the price of X changes.
B) shows how the individual's preferences change as the price of X changes.
C) shows that the income effect is always negative.
D) both a and b
E) both a and c

Question

Quizplus · Accepted Answer

The demand curve for a product, such as X, illustrates how the quantity demanded by a consumer changes in response to changes in the product's price, assuming the consumer is aiming to maximize utility. It does not inherently show changes in preferences (which are considered constant for the analysis) or specify the direction of the income effect, which can vary depending on the type of good in question (normal or inferior).

An Individual's Demand Curve for X