In choosing between an old reliable product and a new attractive product, the consumer will
A) always buy the product with the lower price.
B) always buy the product with the higher MU.
C) buy the one with the higher MU-to-P ratio.
D) buy the one with the lower MU-to-P ratio.

Question

Quizplus · Accepted Answer

The consumer will look for the product with the higher MU-to-P (Marginal Utility to Price) ratio, which takes into consideration both the attractiveness of the product (MU) and its price. The higher the MU-to-P ratio, the more value the consumer will receive for their money. Therefore, the best choice is option C.

In Choosing Between an Old Reliable Product and a New