Question

Which of the following price-quantity data would be part of the demand curve derived from the graph below? Swk 20 23 33, 40 Shelter O price=10, quantity=8 O price=10, quantity=20 O price=10, quantity=40 O All of the above

Answer 1

Optimal demand include points of tangancy of budget line and indifference curves.

Following points are on demand line

(8, P1), (20, P2) and (23, P3)

So, third and forth options can be eliminated.

Now total budget is $200,

Total expenditure in option 1=10*8=$80

Total expenditure in option 2=10*20=$200

So, option 2 meets the criteria.

Correct option is

price=10, quantity =20