Assume a consumer purchases two goods: X and Y.All else constant,an increase in the price of X would cause the total utility the consumer can obtain with her available income to decrease.

Question

Quizplus · Accepted Answer

When the price of good X increases, the consumer may choose to purchase less of X and more of Y to maximize their utility. However, this means that the consumer's overall utility decreases due to a reduction in the consumption of X.

Assume a Consumer Purchases Two Goods: X and Y