When the marginal utility from the consumption of commodity X (Mux) is greater than the...
ECONOMICS
WAEC 2023
When the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px), a rational consumer should
- A. strive to remain in disequilibrium
- B. consume the same quantity of commodity X
- C. consume more of commodity X
- D. reduce consumption of commodity X
Correct Answer: C. consume more of commodity X
Explanation
A rational consumer should consume more of commodity X when the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px). This is because the consumer is getting more satisfaction from consuming each additional unit of commodity X than they are paying for it. As a result, the consumer should continue to consume more of the commodity until the marginal utility is equal to the price.
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