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Question : The consumer gets maximum satisfaction at the point where:

Option 1: Marginal utility = Price

Option 2: Marginal utility > Price

Option 3: Marginal utility < Price

Option 4: Marginal cost = Price


Team Careers360 19th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Marginal utility = Price


Solution : The correct answer is marginal utility = price .

The consumer is most satisfied when marginal utility and price are equal. Marginal utility is the extra pleasure obtained by consuming one more unit of an item. The amount of money a customer must spend on a single unit of an item is its price. The more units a customer purchases of an item, the lower the marginal utility of each additional unit. It is because consuming the same food in excess will make it less and less enjoyable.

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