If a rational consumer must consume either zero or one unit of a good, then an increase in the price of that good with no change in income or in other prices can never lead to an increase in the consumer's demand for it.

Question

Quizplus · Accepted Answer

This is because a rational consumer will always compare the cost of the good with the benefit they receive from consuming it. If the price of the good increases, the consumer may find it more expensive than the benefit they receive from it and choose to consume zero units instead.

If a Rational Consumer Must Consume Either Zero or One