To derive a demand curve using utility analysis,
A)change a consumer's marginal utilities and note the effect of demand curve changes on market prices
B)change a consumer's marginal utilities and note the effect of supply curve changes on market prices
C)change a consumer's marginal utilities and note the effect of supply and demand curve changes on market prices
D)note how the consumer's utility-maximizing consumption bundle changes in response to price changes
E)note how the consumer's utility-maximizing consumption bundle changes in response to demand-curve shifts

Question

Quizplus · Accepted Answer

Utility analysis involves analyzing how a consumer's utility-maximizing consumption bundle changes in response to price changes. By observing how changes in price affect the quantity demanded of a good, a demand curve can be derived. Therefore, the correct choice is D.

To Derive a Demand Curve Using Utility Analysis