If the price of a good falls, the marginal utility per dollar spent on that good:
A) also falls.
B) stays the same.
C) rises.
D) will rise or fall, depending on the consumer.
E) remains unchanged, provided the consumer buys no more of the good.

Question

Quizplus · Accepted Answer

When the price of a good falls, a consumer can buy more of that good with the same amount of money. As a result, the marginal utility per dollar spent on that good will increase, meaning that each additional unit of the good provides more utility, making it more valuable to the consumer. Therefore, the answer is (C) rises.

If the Price of a Good Falls, the Marginal Utility