Suppose the price of pizza falls to $1 per slice. Assuming that Tom's preferences continue to be those shown in the above table, and assuming that MU/P = 3 is still the point at which his consumer optimum is reached, how many slices will Tom now buy?
A) 1 slice
B) 2 slices
C) 3 slices
D) 4 slices

Question

Quizplus · Accepted Answer

If MU/P = 3 is the consumer optimum, and the price per slice is $1, Tom will buy slices until the marginal utility (MU) per slice is 3. If the table shows that at 4 slices, MU is 3, then Tom will buy 4 slices.

Suppose the Price of Pizza Falls to $1 Per Slice