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
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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