If Frank has been consuming 10 tacos per week at a consumer optimum, and the price of tacos falls, how will Frank respond?
A) He will save more income.
B) He will buy more of everything.
C) He will buy more tacos.
D) He will buy more of everything except tacos.

Question

Quizplus · Accepted Answer

If the price of tacos falls, Frank will experience an increase in the marginal benefit of tacos, which will result in him buying more tacos than before. Thus, he will adjust his consumption of tacos to a new consumer optimum by purchasing more tacos.

If Frank Has Been Consuming 10 Tacos Per Week at a Consumer