Question

A consumer makes purchases of an existing product X such that the marginal utility is 10 and the price is $5. The consumer also tries a new product Y and at the current level of consumption it has a marginal utility of 8 and a price of $1. The utility-maximizing rule suggests that this consumer should:

Answer 1

The utility-maximizing rule suggests that this consumer should: Increase consumption of product Y and decrease consumption of product X

Step-by-step explanation: