Isabelle consumes both peaches and bananas.After the price of bananas increased by 20%,Isabelle's consumption of bananas decreased by half.If bananas are on the horizontal axis and peaches on the vertical axis,we can conclude from this information that Isabelle's price consumption curve for peaches and bananas will be:

Question

Quizplus · Accepted Answer

A price consumption curve shows the combinations of two goods that a consumer can purchase at different prices of one good while keeping the other good's price constant. In this case, after the price of bananas increased, Isabelle's consumption of bananas decreased by half. This means that the marginal utility of bananas decreased, and she shifted her consumption to buy more peaches instead. Thus, as the price of bananas increased, Isabelle's demand curve for bananas shifted leftward, leading to a negatively sloped price consumption curve for peaches and bananas.

Isabelle Consumes Both Peaches and Bananas