Consumer utility maximizing combination


The table below shows the marginal utility a costumer would get by purchasing various quantities of A, B, and C. The product prices for A, B, and C are $3, $2, and $1 respectively. The consumer has $20 to spend on the three products.

(1) (2) (3)

Unit of Marginal Marginal Marginal

product utility, A utility, B utility, C

First 30 22 12

Second 27 20 10

Third 24 18 8

Fourth 21 16 6

Fifth 18 14 4

Sixth 15 12 2

(a) What will be the consumer's utility maximizing combination of goods A, B, and C?

(b) What will be the consumer's total utility?

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Macroeconomics: Consumer utility maximizing combination
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