Question

If total utility from 4th unit of a commodity is 21 and 3rd unit is 19 then what will be the marginal utility at 4th unit?​

Answer 1

Answer:

Explanation:

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.