Marginal utility curve of a consumer is also his:a)Indifference curveb...
As the marginal utility of a consumer increases he demands more of a commodity. Therefore, the marginal utility curve derives its shape from demand curve.
Marginal utility curve of a consumer is also his:a)Indifference curveb...
The correct answer is option D: Demand curve.
The marginal utility curve of a consumer represents the relationship between the quantity of a good consumed and the marginal utility derived from consuming that additional unit. It shows how the consumer's demand for a good changes as the quantity consumed increases.
Here is an explanation of why the marginal utility curve is also the demand curve:
1. Definition of Marginal Utility:
- Marginal utility refers to the additional satisfaction or utility that a consumer derives from consuming an additional unit of a good.
- As the consumer consumes more of a good, the marginal utility tends to decrease. This is known as the principle of diminishing marginal utility.
2. Relationship between Marginal Utility and Demand:
- The principle of diminishing marginal utility is crucial for understanding the relationship between marginal utility and demand.
- As the consumer consumes more units of a good, the marginal utility decreases, which means that the consumer derives less satisfaction from each additional unit consumed.
- Consequently, the consumer is willing to pay a lower price for each additional unit consumed.
- This implies that the consumer's demand for the good decreases as the price increases, following the law of demand.
3. Derivation of Demand Curve from Marginal Utility Curve:
- The demand curve represents the relationship between the quantity of a good demanded and its price.
- The marginal utility curve can be used to derive the demand curve by plotting the consumer's willingness to pay for each additional unit consumed at different prices.
- The consumer's willingness to pay is reflected in the marginal utility derived from consuming the good.
- As the price of the good decreases, the consumer's marginal utility increases, and the consumer is willing to consume more units of the good.
- By connecting the points representing the consumer's willingness to pay at different prices, we can obtain the demand curve.
In conclusion, the marginal utility curve represents the consumer's willingness to pay for each additional unit consumed, which is reflected in the demand curve. Therefore, the correct answer is option D: Demand curve.