Question 19
Theory of Consumer BehaviourA consumer maximizes his utility in consuming a good 'x' when
- A.MUx = Px
- B.Px > MUx
- C.Price is falling
- D.MUx > Px.
Show the answer and explanation
Answer: A (MUx = Px)
Explanation
For one good, the consumer is in equilibrium when the marginal utility equals the price.