A. his marginal utility is equal to zero
B. he can equate his demand with price
C. he equates marginal utility and price
D. he can equate his marginal and total utilities

Correct Answer:

Option C – he equates marginal utility and price


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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