Suppose Joe is maximizing total utility within his budget constraint. If the price of the last pair of jeans purchased is $25 an
d it yields 100 units of extra satisfaction and the price of the last shirt purchased is $20, then, using the rule of equal marginal utility per dollar spent, the extra satisfaction received from the last shirt must be: A) 2,000 units of utility.
B) 500 units of utility.
C) 100 units of utility.
D) 80 units of utility.
Price: $20, how many units to maximize the total utility
Let X is the number of units we need to find
As we know that, the law of equal-marginal utility a consumer spends his or her income among goods so that utilities receive from the amount spent is equal. So we use a simple rule of three:
Differential cost is the extra cost that the company would incur if they made the product themselves versus if they bought it from an outside supplier.
Although there are other factors that may act as barriers to effective communication. However the most likely factor here is noise.
It is most likely that when Mary was stating that a dozen cookies cost $2.99, the newspaper staff was affected by noise coming from people or the printing press machines and thought he had heard $29.90.
