There Are Two Conditions Necessary for a Consumer to Maximize

question 33

Multiple Choice

There are two conditions necessary for a consumer to maximize her utility.One is that the marginal utilities per dollar spent on each good and service consumed are equal.What is the other condition?

• A)Total spending on all goods and services must equal the amount available to be spent.
• B)The consumer must be satisfied with the choices she makes.
• C)The total spent on each good and service is the same.
• D)The prices of each good and service consumed must not be too high.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating its sensitivity to price changes.

Revenue Models

Financial frameworks that outline how a business or project generates earnings through its operations and sales.

Breakeven Volume

The quantity of sales or units sold at which total revenues equal total costs, meaning the business makes neither profit nor loss.

Outsourcing Cost

The expenses incurred by a company when it contracts external sources to perform tasks, services, or produce goods that could be done in-house.