Asked by Ninh Thi Thuy Trang on Jun 19, 2024

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If a rational consumer must consume either zero or one unit of a good, then an increase in the price of that good with no change in income or in other prices can never lead to an increase in the consumer's demand for it.

Rational Consumer

An economic concept of a consumer who seeks to maximize utility or satisfaction from goods and services within the constraint of their budget.

Price Increase

A rise in the cost of goods or services, which can be due to various factors such as inflation, increased production costs, or higher demand.

  • Differentiate among various categories of products (such as normal and inferior goods) considering their income and price elasticity.
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DT
Dilani TenishaJun 25, 2024
Final Answer :
True
Explanation :
This is because a rational consumer will always compare the cost of the good with the benefit they receive from consuming it. If the price of the good increases, the consumer may find it more expensive than the benefit they receive from it and choose to consume zero units instead.