If a good's price is volume sensitive,the consumer will:
A) choose the bundle on the budget line that lies on the lowest indifference curve.
B) choose the bundle on the budget line where the budget line is "kinked."
C) choose a boundary solution.
D) choose the bundle on the budget line that lies on the highest indifference curve.

Question

Quizplus · Accepted Answer

When a good's price is volume sensitive, consumers aim to maximize their utility given their budget constraint. The bundle on the budget line that lies on the highest indifference curve represents the combination of goods that provides the highest level of satisfaction or utility to the consumer, given their budget. This is the essence of consumer choice theory, where individuals seek to maximize utility by choosing the combination of goods and services that provides them the most satisfaction.

If a Good's Price Is Volume Sensitive,the Consumer Will