If a consumer is faced with a choice of products A,B,C,...,and has a given money income,the consumer's utility will be maximized when A)MU_A/P_A = MU_B/P_B = MU_C/P_C = ... B)P_A = P_B = P_C = ... C)MU_A = MU_B = MU_C = ... D)TU_A = TU_B = TU_C = ... E)MU_{A =}P_A;MU_{B =}P_B;MU_C = P_{C; ...}

Question

Quizplus · Accepted Answer

The consumer's utility is maximized when the marginal utility per dollar spent is equal across all products, which is represented by the equation MU/P for each product being equal.

If a Consumer Is Faced with a Choice of Products