Figure 7A -Refer to Figure 7A. Which of the following statements can apply to Figure 7A? A) If Pe is assumed to be the market equilibrium price, all those consumers whose WTP is represented by P1 will be expected to decide to purchase this good or service. B) P1 represents what consumers' are willing to pay for the 10^t^h unit of a given good or service, Q. C) Pe represents what consumers' are willing to pay for the 25^t^h unit of a given good or service, Q. D) All can apply. E) None apply.

Question

Quizplus · Accepted Answer

Each statement relates to common interpretations of demand curves and market equilibrium concepts. A) is true because consumers with a willingness to pay (WTP) at or above the equilibrium price (Pe) will purchase the good. B) and C) describe how specific points on the demand curve represent the WTP for the last unit purchased, which is a standard economic principle.

Figure 7A -Refer to Figure 7A. Which of the Following Statements Can