If a consumer is faced with a choice of products A,B,C,...,and has a given money income,the consumerʹs utility will be maximized when
A)MUA/PA = MUB/PB = MUC/PC = ...
B)PA = PB = PC = ...
C)MUA = MUB = MUC = ...
D)TUA = TUB = TUC = ...
E)MUA = PA; MUB = PB; MUC = PC; ...

Question

Quizplus · Accepted Answer

This condition is known as the consumer's equilibrium condition and it represents the point at which the marginal utility per dollar spent on each product is equal. At this point, the consumer is maximizing their total utility subject to their budget constraint. Therefore, choice A represents the best choice.

If a Consumer Is Faced with a Choice of Products