Question

As per _____, a consumer with a single commodity attains equilibrium at a point where MU = Price.

• A. utility analysis
• B. demand analysis
• C. supply analysis
• D. all of the above

Answer 1

Answer: (A)

utility analysis

When a consumer consumes one single commodity then at the consumer's equilibrium point, marginal utility of the good and price of that good will be equal. For example if at 3rd level of consumption the MU is 3 and the price of per unit of that commodity is Rs 3, then the consumer will achieve his equilibrium point at 3rd level of output.