To maximize the satisfaction from consuming good A and good B, each should be purchased up to the point where the relationship between their marginal utilities and prices is:

Question

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The principle of consumer equilibrium or the maximization of utility states that consumers allocate their income in such a way that the last dollar spent on each good provides the same amount of additional utility. This is mathematically represented as the ratio of the marginal utility (MU) of a good to its price (P) being equal across all goods, hence MUa/Pa = MUb/Pb.

To Maximize the Satisfaction from Consuming Good a and Good