Question

the TU of a consumer has been found to be 70 after consumption of 10 units of a commodity. His TU decreases to 60 if he reduce his consumption by one unit. Calculate the MU of the consumer​

Answer 1

Answer:

the TU of a consumer has been found to be 70 after consumption of 10 units of a commodity. His TU decreases to 60 if he reduce his consumption by one unit. Calculate the MU of the consumer

Answer 2

Answer:

Given,

P

X

MU

X

>MU

M

when 10 units of the commodity are consumed.

The consumer should not reduce, rather increase the consumption the consumption of commodity X in order to achieve equilibrium. Only when the consumption of X is increased that MU

X

will reduce, so that

P

X

MU

X

becomes equal to MU

M

.