If the price of one of the products associated with indifference curves increases, all else the same, what is the result?

Prices will be lower

The individual is able to get to about the same level of utility.

The individual is able to get to a lower level of utility.

The individual is able to get to a higher level of

Question

Karissa Espinoza

Business

7 June, 13:20

If the price of one of the products associated with indifference curves increases, all else the same, what is the result?

Prices will be lower

The individual is able to get to about the same level of utility.

The individual is able to get to a lower level of utility.

The individual is able to get to a higher level of

+1

Answers (2)

Know the Answer?

Armani · Answer 1

The individual is able to get to a lower level of utility

Russo · Answer 2

The correct answer is letter "C": The individual is able to get to a lower level of utility.

Explanation:

An Indifference Curve determines the combination of two goods that will provide equal satisfaction. If you want more of one good and less of another, you will be willing to trade some of one for more of the other. But the amount of the first good you are willing to give up will decrease once you obtain more of the second.

In front of the raise of the price of the goods, plotted in a graph, the indifference curves move inwards implying the consumer satisfaction reduces.