A) Marginal Utility = Price
B) Marginal Utility > Price
C) Marginal Utility < Price
D) Marginal Cost = Price
Correct Answer: A
Solution :
As per the law of diminishing marginal utility, the utility of each successive unit goes on diminishing as more and more units of a commodity are consumed. A rational consumer will consume the commodity up to a point where the marginal utility of the final unit of the commodity is equal to the marginal utility of money (in terms of price) paid for it. In this way, the consumer will get the maximum satisfaction and will be in equilibrium.
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