We know with certainty that a consumer will buy a newly introduced product rather than an existing product when the
A) MU/P of the new product exceeds the MU/P of the existing product.
B) price of the new product is less than the price of the existing product.
C) MU of the new product is more than the MU of the existing product.
D) law of diminishing marginal utility applies to the existing product.

Question

Quizplus · Accepted Answer

The consumer will buy a newly introduced product rather than an existing product when the MU/P (marginal utility per unit price) of the new product exceeds the MU/P of the existing product. This means that the new product provides greater satisfaction per dollar spent than the existing product, making it a more enticing choice for consumers.

We Know with Certainty That a Consumer Will Buy a Newly