According to the rational spending rule,for a rational consumer the relationship between the price of an item and the utility gained by consuming that item is
A)the lower the price,the greater the total utility.
B)the lower the price,the greater the marginal utility.
C)the lower the price,the lower the marginal utility.
D)the higher the price,the lower the marginal utility.

Question

Quizplus · Accepted Answer

According to the rational spending rule, a rational consumer will continue to consume an item until the marginal utility (additional satisfaction gained from consuming one more unit) is equal to the price of the item. Therefore, the lower the price, the lower the marginal utility needed to justify purchasing the item.

According to the Rational Spending Rule,for a Rational Consumer the Relationship