If the price of marshmallow exceeds the marginal value that the consumer places on marshmallows,then
A) the consumer is at the optimum.
B) the consumer's level of satisfaction would increase if he buys more marshmallows and less of other goods.
C) a surplus of marshmallows exists in the market.
D) the optimum contains fewer marshmallows than the consumer is currently buying.

Question

Quizplus · Accepted Answer

If the price of marshmallows exceeds the marginal value that the consumer places on them, it means that the consumer is paying more for marshmallows than they are worth to them. Therefore, the consumer is buying too many marshmallows and should reduce their consumption to reach their optimum level of consumption. This means that the optimum contains fewer marshmallows than the consumer is currently buying.

If the Price of Marshmallow Exceeds the Marginal Value That