As price falls along the demand curve for pretzels, _____.
A)the ratio of marginal utility of pretzels to its price increases
B)the marginal valuation of pretzels increases
C)consumption of pretzels increases and marginal utility decreases
D)the marginal valuation of pretzels decreases
E)total utility and marginal utility remains unchanged

Question

As price falls along the demand curve for pretzels, _____.​
A)the ratio of marginal utility of pretzels to its price increases
B)the marginal valuation of pretzels increases
C)consumption of pretzels increases and marginal utility decreases
D)the marginal valuation of pretzels decreases
E)total utility and marginal utility remains unchanged

Quizplus · Accepted Answer

According to the law of demand, as the price of a good falls, the quantity demanded increases. Therefore, at lower prices, consumers have already satisfied their most urgent needs and are willing to pay less for additional units. This means that the marginal valuation of pretzels decreases as the price falls along the demand curve.

As Price Falls Along the Demand Curve for Pretzels, _____