The cost of an ice cream is Rs. 20. Sandhya has already consumed 4 ice creams. Her
marginal utility of money is 4. Should she consume more ice cream or should she stop the consumption? Justify your answer with valid reasons.
Answers
Answered by
0
Answer:
24 ice cream is the right answer
Answered by
11
Answer:
She should stop her consumption.
Explanation:
At consumer equilibrium, MUx / Px = MUm;
Thus, substituting the values we get,
MUx = 20 * 4 = 80 utils.
(Whereas, in the ice cream , 20*4*4)
Thus, she should stop her consumption.
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