At the consumer's optimum,the consumer's valuation of the two goods equals the market valuation.

Question

Quizplus · Accepted Answer

At the consumer's optimum, the consumer is maximizing their satisfaction with their available budget. This means that the marginal utility per dollar spent on each good is equal at the point where the consumer is allocating their budget optimally. Therefore, the consumer's valuation of the two goods (as measured by their marginal utility) equals the market valuation (as measured by the prices of the goods) at the point of consumer's optimum.

At the Consumer's Optimum,the Consumer's Valuation of the Two Goods