Question

why do consumers make a choice by looking at both the marginal utility (mu) and the price for a product (mu/p) rather than just the price or just the marginal utility?

Answer 1

Consumers always try to equate marginal utility of a good to its price which is a marginal cost of consumption.

What is marginal utility and why consumers make a choice by looking at both mu and price?

1. So economically a utility is a kind of benefit that a consumer gets by buying a product  of choice.
2. Now marginal utility is the benefit one gets by buying an additional unit of consumption except the first product bought.
3. Here the question is asked about the consumer taking notice of both marginal utility and price while buying goods.
4. Hence consumers watch for the marginal utility and price of the good both to equate the marginal utility to its price which is a marginal cost of consumption.

To know more about marginal utility visit:

brainly.com/question/15561406

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