When the price of a good decreases:
A) the good becomes less expensive relative to other goods and the consumer's purchasing power increases.
B) the good becomes less expensive relative to other goods and the consumer's purchasing power decreases.
C) the good becomes more expensive relative to other goods and the consumer's purchasing power increases.
D) the good becomes more expensive relative to other goods and the consumer's purchasing power decreases.

Question

Quizplus · Accepted Answer

When the price of a good decreases, the good becomes less expensive relative to other goods, which means the purchasing power of the consumer increases. This is because the consumer can now afford to buy more of the same good or allocate their budget towards other goods.

When the Price of a Good Decreases