Economy, asked by kanishkarastogi, 8 months ago

consider the following utility schedule. how many units of a commodity should a consumer consume to be in equilibrium if market price of the good is rs 3 per unit. explain with reason.
units consumed: 1 2 3 4 5 6 7 8
total utility: 10 18 24 28 31 33 33 29 ​

Answers

Answered by ssinghrajput115
1

Answer:

Consumer attains equilibrium when:

P

x

MU

x

=MU of Money

or, when MU

x

=P

x

. MU of Money,

Substuting the given values, the consumer attains equlibrium when:

MU

x

=6×1=6.

Implying that the equilibrium is attained when 4 units of the commodity are purchased. (The table show that when MU

X

=6,4) units are purchased )

Therefore, the consumer should purchase 4 units in order maximum satisfaction.

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