A consumer will buy a new product rather than an existing product
A)when the MU/P of the new product is less than the MU/P of the existing product.
B)when the substitution of the new product for the old product increases the consumer's total utility.
C)only if the new product has a lower price than the existing product.
D)only if the MU of the new product exceeds the MU of the existing product.

Question

Quizplus · Accepted Answer

A consumer will choose a new product over an existing one if substituting it increases their total utility, meaning the satisfaction or benefit derived from the new product is greater than that from the existing product.

A Consumer Will Buy a New Product Rather Than an Existing