To Reach the Consumer Optimum for Two Goods,the

question 91

Multiple Choice

To reach the consumer optimum for two goods,the

• A) ratio of marginal utility to price for both goods must be equal.
• B) marginal utility for both goods must be equal.
• C) total utility for both goods must be equal.
• D) ratio of total utility to price for both goods must be equal.
• E) price of both goods must be equal.

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Definitions:

Single Firm

A business or company that operates alone in its industry without competitors.

Purely Monopolistic

Characterizes a market scenario where one entity exclusively controls the entire market for a product or service, eliminating all direct competition.

Downsloping Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded, indicating that as price decreases, demand increases.

Entry Barriers

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, stringent regulations, and established brand loyalty.