The table below shows the total utility associated with various units of goods X and Y.Table 7.5

-The demand curve for a product can be derived from consumer equilibrium by:
A)altering the prices of all other products.
B)altering consumer incomes.
C)shifting consumer preferences.
D)altering the price of the good itself.
E)knowing the demand curves for all other products.

Question

The table below shows the total utility associated with various units of goods X and Y.Table 7.5
 
-The demand curve for a product can be derived from consumer equilibrium by:
A)altering the prices of all other products. 
B)altering consumer incomes. 
C)shifting consumer preferences. 
D)altering the price of the good itself. 
E)knowing the demand curves for all other products.

Quizplus · Accepted Answer

The demand curve for a product can be derived by altering the price of the good itself while keeping all other factors constant. This is known as the law of demand, which states that a decrease in the price of a good will lead to an increase in its quantity demanded, ceteris paribus (i.e., holding all other factors constant). By observing the quantity demanded at different prices, we can derive the demand curve.

The Table Below Shows the Total Utility Associated with Various