The optimal amount of Pizza that John would be able to buy is 5.
<h3>How to solve for the optimum</h3>
1. We can see that he has zero as his 6th consumption based on marginal Utility. This shows that he can consume 5 pieces of Pizza.
2. If he should purchase 8 slices, total utility is calculated as
20 + 12 + 10 + 6 + 2 + 0- 2 - 6
= 42
3. This is added as an attachment
4. Total amount that John can spend = $ 20. Given that he cannot make use of his savings, the total amount that he can consume would be what is less than 3 slices and 4 funnel cake.
5. The total utility that John is going to gain would be calculated as
Total utility = 20+12+50+40+32+20 = 32 + 142 = 174
This puts the total utility at 174
Read more on marginal utility here:
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