What concept explains why a consumer should purchase the product which yields the greatest marginal utility per dollar spent?
A)Law of diminishing marginal utility.
B)Law of diminishing returns.
C)Optimal purchasing rule.
D)Consumer surplus rule.

Question

Quizplus · Accepted Answer

The concept that explains why a consumer should purchase the product that yields the greatest marginal utility per dollar spent is referred to as the optimal purchasing rule. This rule suggests that consumers should spend their money on the product that provides the highest level of satisfaction for each dollar spent. The Law of diminishing marginal utility and Law of diminishing returns are related but not as directly applicable to this concept. The consumer surplus rule is a different concept altogether in economics.

What Concept Explains Why a Consumer Should Purchase the Product