If the price of a good rises, the resulting decrease in the quantity purchased will increase the marginal utility of the good.

Question

Quizplus · Accepted Answer

When the price of a good rises and the quantity purchased decreases, the individual may derive greater satisfaction or utility from the reduced consumption. This is because they are now more willing to pay a higher price for the remaining units of the good, indicating that their marginal utility for each unit has increased. Therefore, the statement is true, and the marginal utility of the good does increase as the price increases.

If the Price of a Good Rises, the Resulting Decrease