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The Demand for a Certain Energy-Efficient Home Is Given by F

Question 104

Multiple Choice

The demand for a certain energy-efficient home is given by f( P1\mathrm { P } 1 , P2\mathrm { P } 2 ) , where p1 is the price of the home and p2 is the price of electricity. Which of the following explains why fp2\frac { \partial \mathrm { f } } { \partial \mathrm { p } 2 } > 0?


A) The price of electricity keeps going up due to increased demand.
B) Homes are too expensive during energy crises.
C) As the price of electricity goes up, demand for the home goes up.
D) As the price of electricity increases, demand for the home depends more on the price of the home than on the price of electricity.
E) As the price of electricity goes up, demand for the home goes down.

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