The consumer maximizes his total utility (measured in money terms) when, at his chosen quantity of every good he buys, marginal utility
A)equals zero.
B)divided by price equals zero.
C)equals price.
D)equals total utility.

Question

Quizplus · Accepted Answer

The consumer maximizes total utility when the marginal utility (MU) of a good equals its price. This is because the consumer allocates their budget in a way that the last unit of currency spent on each good provides the same amount of satisfaction, ensuring no better allocation of spending could increase their total utility.

The Consumer Maximizes His Total Utility (Measured in Money Terms)