If all consumers in an economy have maximized their utility,and they face a given set of market prices,then each consumer will have identical
A)total utilities for each good.
B)consumption of each good.
C)marginal utilities per unit of each good.
D)marginal utilities for each good.
E)ratios of marginal utility to price for each good.

Question

Quizplus · Accepted Answer

When all consumers have maximized their utility and face a given set of market prices, they will allocate their spending according to the ratios of marginal utility to price for each good. This ensures that consumers get the most satisfaction possible given their budget constraint. As a result, the ratios of marginal utility to price will be identical for all consumers in the economy. Therefore, the correct choice is E.

If All Consumers in an Economy Have Maximized Their Utility,and