Question

Which of the following is truuee??

A.If for some reason the price of a good changes, ghen the whole demand curve for the good shifts.

B.The idea of dimishing marginal returns implies that different people afssignt different values to the same good

C.To obtain the demand curve for the whole market, one can simply sum horizontally all individual demand curves

D none of the above

Answer 1

The True Option is Option C :

C. To obtain the demand curve for the whole market, one can simply sum horizontally all individual demand curves.

Explanation

A. If for some reason the price of a good changes, then the whole demand curve for the good not shifts.  The whole demand curve for the good can shifts due to change in income, price of related goods and preferences. If for some reason the price of a good changes, it will results only change in the quantity demanded for a particular good  at a given price.

B. The idea of diminishing marginal returns implies, that if we increase the supply of one factor of production keeping other factors of production constant, it will lead to decline in the marginal output.

C. Option C is true , To obtain the demand curve for the whole market, one can simply sum horizontally all individual demand curves. It can be understand by the following diagram: