Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
By purchasing less of the more expensive goods
B
By increasing consumption of all goods
C
By ignoring the price change
D
By purchasing only the least expensive goods
Understanding the Answer
Let's break down why this is correct
Answer
When the price of a good changes, consumers often adjust what they buy to get the most satisfaction, or utility, from their money. If the price of a product they like goes down, they might buy more of it because they can now afford to get more while still having money left for other things. Conversely, if the price goes up, they may buy less of that item and look for cheaper alternatives that still provide similar satisfaction. For example, if the price of apples rises, a consumer might decide to buy fewer apples and instead purchase more bananas, which are now a better deal. This way, they can still enjoy their fruit while maximizing their overall happiness with their budget.
Detailed Explanation
When prices go up, people often buy less of those items. Other options are incorrect because Thinking that buying more of everything will help is a mistake; Ignoring price changes can lead to overspending.
Key Concepts
consumer behavior
Topic
Utility Maximization After Price Change
Difficulty
easy level question
Cognitive Level
understand
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