A consumer receives an income of $1000 per week. The consumer uses 80% of this income on goods and services. After the consumer’s income rises to $1200 per week, weekly consumption rises to $900. Which statement is correct?
- AThe average propensity to consume does not change.
- BThe initial average propensity to consume is 5.
- CThe marginal propensity to consume is 0.5.
- DThe marginal propensity to consume is 2.