The MU\P ratio for good X is greater than the MU\P ratio for good Y as a result of a fall in the price of good X. To achieve consumer equilibrium, the consumer reallocates dollars from the purchase of good Y to the purchase of good X. In the process, the consumer
A)puts downward pressure on prices.
B)maximizes total utility.
C)acts according to the law of supply.
D)minimizes total utility.

Question

Quizplus · Accepted Answer

The consumer reallocates their spending to achieve equilibrium and maximize their total utility. This means they are trying to get the most satisfaction or benefit from their spending, which is the goal of consumer behavior. The other choices are not relevant to the situation described.

The MU\P Ratio for Good X Is Greater Than the MU\P