For Bobby, the marginal utility of the 9th soda in a day is positive and the mar

Question

For Bobby, the marginal utility of the 9th soda in a day is positive and the marginal utility of the 10th soda in a day is zero. This


A. implies that Bobby's demand curve for sodas per day will become upward sloping at 10 sodas per day.


B. is impossible because each additional unit of consumption of any good must provide positive marginal utility.


C. implies that at a zero price Bobby's demand curve will intersect the quantity axis at 10.


D. implies that Bobby maximizes utility by consuming 9 sodas per day.

Explanation / Answer

Answer is D. Actually, the total utility is the same for 9 and 10 sodas.

A is wrong, no typical good has an upwards sloping demand curve that begins initially with a downwards slope (giving a parabolic shape) unless it's a Giffen good.

B is also wrong. While no one would purchase a good that provides marginal utility voluntarily, it is not impossible. After you've eaten 500 slices of pizza, an additional slice will obviously not net you more utility.

C is wrong because the demand curve never has a point on the x-axis or quantity-axis. A good or service being free is not covered by the demand curve.

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