Figure 21-11
-Refer to Figure 21-11.Assume that the consumer depicted the figure has an income of $50.Based on the information available in the graph,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) P=$2.50,Q=6
B) P=$2.50,Q=10
C) P=$5.00,Q=3
D) P=$5.00,Q=5

Question

Figure 21-11 
-Refer to Figure 21-11.Assume that the consumer depicted the figure has an income of $50.Based on the information available in the graph,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) P=$2.50,Q=6 
B) P=$2.50,Q=10 
C) P=$5.00,Q=3 
D) P=$5.00,Q=5

Quizplus · Accepted Answer

At a price of $2.50 for chocolate chips, the consumer would be willing to purchase 10 marshmallows, as this is the point where the marginal utility per dollar spent on marshmallows is equal to the marginal utility per dollar spent on chocolate chips (where the two lines intersect). This combination of price and quantity would be on the consumer's demand curve for marshmallows.

Figure 21-11 -Refer to Figure 21-11.Assume That the Consumer Depicted the Figure