If the Marginal Utilities from Two Goods Are Not Equal,then

question 27

Multiple Choice

If the marginal utilities from two goods are not equal,then the consumer

• A)cannot be in equilibrium.
• B)should increase consumption of the good with the lower marginal utility.
• C)should decrease consumption of the good with the lower marginal utility.
• D)may possibly be in equilibrium.
• E)will definitely be in equilibrium.

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Definitions:

Pure Monopoly

A market structure where a single firm is the sole producer of a product or service with no close substitutes, giving it significant control over price.

Profit-maximizing Price

The price level at which a company can sell its product or service to maximize its profit, considering cost, demand, and competition.

Economic Profits

The excess of total revenue over total cost, including both explicit and implicit costs, reflecting the true profitability of a business.

Marginal-cost Pricing

A pricing strategy where the price of a product is set equal to the additional cost of producing one extra unit of output.