Show that there is inverse relation between price of a commodity and its quantity demanded . UseUtility Analysis.

Show that there is inverse relation between price of a commodity and i

1.	Show that there is inverse relation between price of a commodity and its quantity demanded . UseUtility Analysis.
Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/assuming-1986865" style="font-weight:bold;" target="_blank" title="Click to know more about ASSUMING">ASSUMING</a> that the <a href="https://interviewquestions.tuteehub.com/tag/consumer-25599" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMER">CONSUMER</a> <a href="https://interviewquestions.tuteehub.com/tag/consumes-931374" style="font-weight:bold;" target="_blank" title="Click to know more about CONSUMES">CONSUMES</a> only two goods X andY and is in equilibrium. Then,`(MU_(x))/(P_(x))=(MU_(y))/(P_(y))`<br/>Now suppose Px <a href="https://interviewquestions.tuteehub.com/tag/falls-983294" style="font-weight:bold;" target="_blank" title="Click to know more about FALLS">FALLS</a> ,then`(MU_(x))/(P_(x))gt(MU_(y))/(P_(y))`<br/>Since per rupee marginal utility of Xisgreater than per rupee marfinal utility of Y , the consumer will buymoreofX . Itshows inverse relation between price of X and <a href="https://interviewquestions.tuteehub.com/tag/demand-436956" style="font-weight:bold;" target="_blank" title="Click to know more about DEMAND">DEMAND</a> for X.</body></html>