Question

Which of the following is true of consumer equilibrium?

a. In equilibrium, higher-priced products yield lesser marginal utility than lower-priced products.
b. In equilibrium, a consumer has an incentive to consume more.
c. In equilibrium, a consumer derives negative total utility.
d. In equilibrium, higher-priced products yield more marginal utility than lower-priced products.

Answer 1

In consumer equilibrium, a higher-priced product yields lesser marginal utility than a lower-priced product.

Step-by-step explanation:

In consumer equilibrium, the consumer maximizes their satisfaction by allocating their budget between different goods in a way that the ratio of the prices of goods is equal to the ratio of the marginal utilities. As a result, a higher-priced product will yield lesser marginal utility than a lower-priced product.