📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Which curve is known as the

    willingness-and-ability-to-pay curve?
    A Supply Curve Correct Answer Incorrect Answer
    B Philips Curve Correct Answer Incorrect Answer
    C Lorenz Curve Correct Answer Incorrect Answer
    D Demand Curve Correct Answer Incorrect Answer
    E None of the Above Correct Answer Incorrect Answer

    Solution

    Demand curve can be considered as the willingness-and-ability-to-pay curve. It shows the maximum price a consumer is willing to pay for that quantity of a good or service. The maximum price a consumer is willing to pay for that quantity of a good or service is the measure of marginal benefit that the consumer receives for that unit of output. As the quantity available increases, the marginal benefit of each additional unit falls and the highest price the consumer is willing and able to pay also falls.  

    Practice Next
    More Theory of Demand and Supply Questions
    ask-question