When markets are large and competitive, the consumer merely chooses the bundle of goods that provides the most utility given
A) income and tastes only
B) income, tastes, and the prices prevailing in the market
C) the prices prevailing in the market only

Question

Quizplus · Accepted Answer

In large and competitive markets, consumers have the ability to choose from a variety of goods and services that have different prices. Therefore, when making a purchase decision, consumers take into account not only their income and tastes but also the prices of the goods they are considering. Thus, the consumer chooses the bundle of goods that provides the highest utility given income, tastes, and the prices prevailing in the market.

When Markets Are Large and Competitive, the Consumer Merely Chooses