Economy, asked by ayaanmallick23846, 5 months ago

By planning to spend his entire income only on two goods the consumer finds that MUx/Px < MUy/Py. How will the consumer react

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Answered by Deaths

Explanation:

Answer: Suppose there are two goods 'x' and 'y' on which the consumer has to spend his given income. If MUx / Px is greater than MUy / Py, then the consumer will substitute good 'x' for good 'y'. As a result the marginal utility of good 'x' will fall

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