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The marginal value that a consumer places on the last unit can be read off of the _____
The marginal value that a consumer places on the last unit can be read off of the _____.
a. demand curve
b. supply curve
c. contract curve
d. production possibility curve
Expert Solution
a. Demand curve
Reason: The demand curve of a consumer also represents the marginal benefit or the marginal utility obtained on consuming different units of a good. The shape of a demand curve being downward sloping represents that as more and more units of good are consumed, the consumer obtains lesser utility on further consumption of units. The area between the y axis intercept of the demand curve and the market price represents the consumer surplus, which shows how which utility in monetary terms does the consumer obtain in buying various quantities of a good.
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