Consumption Function: Formula, Assumptions, and Implications
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Consumption Function: Formula, Assumptions, and Implications
The consumption function is a mathematical formula that represents the functional relationship between total consumption and gross national income.
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The graph represents consumption (C) as a function ofdisposable income (DI). Assume the consumption function islinear. What is the value of the marginal propensity toconsume (MPC)?Consumption1050900Round the value of the MPC to two decimal places.750MPC = 600450300150C = DIC0150 300 450 600 750 900 1050Disposable income
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