Consumers should purchase a good up to the point where MU = P.

Question

Quizplus · Accepted Answer

MU (marginal utility) represents the additional satisfaction or benefit derived from consuming an additional unit of a good, while P (price) represents the cost or sacrifice required to acquire the good. Consumers should continue purchasing a good until the additional benefit derived from the last unit consumed is equal to the cost of that unit, which is represented by the point where MU = P. Beyond this point, the cost of each additional unit exceeds the benefit, resulting in a decreased overall satisfaction.

Consumers Should Purchase a Good Up to the Point Where