A consumer of a single commodity is in equilibrium when
ECONOMICS
JAMB 2022
A consumer of a single commodity is in equilibrium when
- A. he can equate his demand with price
- B. he equates marginal utility and price
- C. he can equate his marginal and total utilities
- D. his marginal utility is equal to zero
Correct Answer: B. he equates marginal utility and price
Explanation
A consumer is in equilibrium when the marginal utility equal to the price of the commodity i.e MUx = Px. Where : X = the commodity MU = Marginal utility P = price of the commodity Therefore, a consumer who consume a single commodity such as apple will be at equilibrium when MUa = Pa
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