Economics WAEC

If the marginal utility of a commodity is equal to its price then?

A. the consumer is in equilibrium
B. more of the commodity can be consumed
C. total utility is also equal to its price
D. the market is not in equilibrium

Correct Answer: Option C

C. total utility is also equal to its price

Explanation

The price a consumer is willing to pay for a good depends on his marginal utility, the marginal utility declines with each additional unit of consumption, according to the law of diminishing marginal utility. Therefore, the price is equal to the marginal utility

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