Which of the following occurs when a consumer equilibrium has been achieved?
A) The marginal utility of the last unit purchased is identical for all goods.
B) The price of the last unit purchased is identical for all goods.
C) An equal amount of income is spent on all goods purchased.
D) The ratio of the marginal utility of each good divided by its price is equal across all goods consumed.

Question

Quizplus · Accepted Answer

When a consumer equilibrium has been achieved, the ratio of the marginal utility of each good divided by its price is equal across all goods consumed. This is because at this point, the consumer is allocating their income in a way that maximizes their utility by obtaining the most satisfaction possible from each dollar spent. Therefore, the consumer will continue to allocate their spending until the marginal utility per dollar spent on each good is equal.

Which of the Following Occurs When a Consumer Equilibrium Has