An increase in the price of a good leads to: a decrease in the marginal utility per dollar of that good, and thus a decrease in the quantity purchased. an increase in the marginal utility per dollar of that good, and thus an increase in the quantity purchased. a decrease in the marginal utility per dollar of that good, and an increase in the quantity purchased. an increase in the marginal utility per dollar of that good, and a decrease in the quantity purchased.

a decrease in the marginal utility per dollar of that good, and thus a decrease in the quantity purchased.

Explanation:

In Economics, the law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal (ceteris paribus).

According to the law of demand, there exist a negative relationship between the quantity of goods demanded and the price of a good i.e when the prices of goods and services in the market increases or rises: there would be a significant decline or fall in the demand for this goods and services.

This ultimately implies that, an increase in the price level of a product usually results in a decrease in the quality of real output demanded along the aggregate demand curve.

Price can be defined as the amount of money that is required to be paid by a buyer (customer) to a seller (producer) in order to acquire goods and services. Thus, it refers to the amount of money a customer or consumer buying goods and services are willing to pay for the goods and services being offered.

The marginal utility of goods and services can be defined as the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.

Hence, if a seller increases the price of a good, it would eventually lead to a decrease in its marginal utility per dollar, and thus, leading to a decrease in the quantity of the good that would be purchased by consumers.

For example, if there's an increase in the price of a chocolate cake, the marginal utility per dollar of the chocolate cake decreases and thus, leading to a decrease in the quantity of chocolate cake that would be purchased by the consumers; leading to a downward slope of its demand curve.

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