Asked by Hunter Stankiewicz on Jul 08, 2024
Verified
When you are maximizing your utility for product A,
A) marginal utility of A = 0.
B) marginal utility of A = 1.
C) marginal utility of A = price of
D) None of these are true.
Marginal Utility
It describes the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.
- Understand how marginal utility affects decisions in utility maximization.
Verified Answer
KS
KARANVEER SINGHJul 10, 2024
Final Answer :
C
Explanation :
When maximizing utility for a product (A in this case), the marginal utility of consuming an additional unit of A should equal the price of A. This is a fundamental principle of consumer choice theory, indicating that consumers allocate their budget to equate the marginal utility per dollar spent across all goods.
Learning Objectives
- Understand how marginal utility affects decisions in utility maximization.
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