When trying to purchase an item with a high value
Consumers always try to equate marginal utility of a good to its price which is a marginal cost of consumption.
<h3>What is marginal utility and why consumers make a choice by looking at both mu and price?</h3>
- So economically a utility is a kind of benefit that a consumer gets by buying a product of choice.
- Now marginal utility is the benefit one gets by buying an additional unit of consumption except the first product bought.
- Here the question is asked about the consumer taking notice of both marginal utility and price while buying goods.
- 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.
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