Question

The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium?

A. $4 and $6
B. $6 and $4
C. $8 and $12
D. $16 and $9

Answer 1

Answer:

The answer is B. $6 and $4

Explanation:

$6 and $4 are the set of prices that would be consistent with consumer equilibrium, as they give the same marginal utility to price ratio of 2.