Which of the following is true when the price of a good is zero?
A)A consumer will consume additional units of the good as long as the ratio of total utility to price is positive.
B)A consumer will consume an infinite quantity of the good as the good is available free of cost.
C)A consumer will consume additional units of the good as long as marginal utility is positive.
D)A consumer will consume the entire amount of the good available in the market.
E)A consumer will consume until total utility derived from consumption becomes zero.

Question

Quizplus · Accepted Answer

When the price of a good is zero, a rational consumer will continue to consume additional units of the good as long as the marginal utility (additional satisfaction from consuming one more unit) is positive. This is because consuming more of the good increases their total utility without any cost.

Which of the Following Is True When the Price of a Good