-Refer to the above diagram.The APC diminishes as income increases for: A) none of the consumption schedules shown. B) C₃ only. C) C₁,and C₂. D) C₄ only.

Question

Quizplus · Accepted Answer

The Average Propensity to Consume (APC) diminishes as income increases for consumption schedules where consumption increases at a decreasing rate as income rises. This is typically shown in schedules like C₁ and C₂, where the slope of the consumption function decreases as income increases, indicating a lower proportion of income is spent on consumption.

-Refer to the Above Diagram