Which of the following statements is true?
A)If a consumer is in equilibrium, it does not necessarily follow that he or she is also achieving the greatest total utility.
B)If a consumer is in equilibrium, it necessarily follows that he or she is also achieving the greatest total utility.
C)If a consumer is attaining the greatest marginal utility, then it necessarily follows that he or she is also achieving the greatest total utility.
D)If a consumer is attaining the greatest total utility, then it necessarily follows that he or she is also achieving the greatest marginal utility.

Question

Quizplus · Accepted Answer

In consumer theory, equilibrium is reached when a consumer allocates their income in a way that maximizes their total utility given the prices of goods and services. This means that at equilibrium, the consumer cannot increase their total utility by reallocating their spending, implying they are achieving the greatest total utility possible with their income and the given prices.

Which of the Following Statements Is True