Question : Assertion: The concept of marginal utility becomes irrelevant when the consumer faces perfect competition.
Reason: In perfect competition, the consumer is a price taker and must accept the market price without considering individual preferences.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: The assertion is false, but the reason is true.
Solution : The correct answer is (d) Option D The assertion is false, and the reason is true.
The concept of marginal utility does not become irrelevant when the consumer faces perfect competition. Marginal utility is still a relevant concept in understanding consumer preferences and decision-making, regardless of the market structure. It represents the additional satisfaction obtained from consuming an additional unit of a good and plays a role in informing consumer choices.
In perfect competition, the consumer is indeed a price taker and must accept the market price without exerting individual influence over it. However, this does not render the concept of marginal utility irrelevant. Even though consumers must accept the market price, their preferences and the utility derived from consuming goods still play a role in determining the quantity of goods demanded.
