Consumer Equilibrium Is Reached When

question 112

Multiple Choice

Consumer equilibrium is reached when:

• A) an individual spends her entire income.
• B) there is no way a consumer, given the available income, could increase her satisfaction.
• C) marginal utility begins to diminish.
• D) marginal utility is maximized, subject to the available income.

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Definitions:

Lowest Price

The minimum cost at which a product or service can be purchased, often emphasized in marketing to attract consumers.

Short Run

A period during which at least one input, such as plant size or capital, is fixed and cannot be changed.

Maximum Profit

The highest possible financial gain achievable by a firm from its operations, after all costs have been subtracted from total revenue.

Output

The quantity of goods or services produced within a given time frame by a firm, industry, or country.