A consumer with unlimited income will continue consuming goods until
A) the marginal utility of each is equal to zero.
B) the marginal utility of each is negative.
C) total utility rises.
D) marginal utility equals total utility.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a consumer consumes more and more units of a good, the marginal utility (additional satisfaction) derived from each additional unit consumed decreases. Eventually, the marginal utility will reach zero, indicating that the consumer no longer derives any additional satisfaction from consuming more of that good. If the consumer has unlimited income, they will continue to consume until marginal utility reaches zero for each good. Therefore, the correct choice is A, where the consumer stops consuming when the marginal utility of each good is equal to zero.

A Consumer with Unlimited Income Will Continue Consuming Goods Until