Answer to Question #178659 in Microeconomics for saqlain

Question

a. Zimal is found of McChicken burger and likes to have it at least four times a month. If she earns 60,000 per month with no change in her income level and accumulated wealth. Examine the following behavior and identify the relationship between price and quantity demanded. Also, draw the demand curve and elucidate why the curve is upward/downward/vertical/horizontal in shape.

Price per Burger Quantity Demanded
750 4
635 6
555 8
475 10
350 12

Answer 1

All combinations provided are attainable for Zimal according to his level of income.

The higher is price of a burger, the lower is quantity demanded and vice versa, this relationship is called the law of demand.

The demand curve is downward-sloping, and the equilibrium level of consumption can be determined in the point of intersection with the supply curve.