A Consumer Had Been Consuming Product X for Some Time

question 148

Multiple Choice

A consumer had been consuming product X for some time. This period, she buys fewer X in order to try some units of a new product Y. She finds that her marginal utility of X is 20 (at a price of $10 per unit) , while the marginal utility of Y is 36 (at a price of $12) . The utility-maximizing rule suggests that this consumer should

• A) increase consumption of product X because of its lower price.
• B) increase consumption of product X because it is an old reliable product.
• C) increase consumption of product Y because it has a higher MU/P.
• D) increase consumption of product Y because it has a higher MU.

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Definitions:

Polycentric View

Refers to a perspective in international business where a company adapts its strategies and operations to the local conditions of the countries it operates in, often giving significant autonomy to each local branch.

Divestiture

The process of selling off subsidiary business interests or investments by a company to refocus its operations or to raise capital.

Core Competencies

Fundamental strengths or advantages of a business or organization that set it apart from competitors.

Turnaround

A process or strategy aimed at recovering a company from a period of poor performance and financial decline to achieve positive financial results and operational efficiency.