Question

A consumer gets $50$ utils of utility from the consumption of $1st$ unit of commodity - X. On the assumption that for every additional unit of $X$, he loses $10$ utils of utility, how much unit (s) of $X$ will he consume if, it was available to him at price of $Rs.5$ per unit, and his marginal utility of money $=10$?

Answer 1

We are given the following information:

Units of $Commodity-X$	$1$	$2$	$3$	$4$	$5$	$6$
$M{U}_x$	$50$	$40$	$30$	$20$	$10$	$0$

$P_X=Rs.5$ per unit
$M{U}_M=10$
We know, equilibrium is struck when:
$\frac{M{U}_X}{P_x}=M{U}_M$
It happens when: $\frac{M{U}_X}{5}=10$
Or, when $M{U}_X=50$
Implying that the consumer finds his equilibrium when he consumes only one unit of the commodity -$X$.