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What should a consumer do if the marginal utility per rupee of a good is lower compared to other goods?

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Question

What should a consumer do if the marginal utility per rupee of a good is lower compared to other goods?

Options

  • Spend more on it

  • Leave prices unchanged

  • Ignore the budget

  • Reduce spending on it

MCQ
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Solution

Reduce spending on it

Explanation:

The consumer should reduce spending on that good until MU/P equalises.

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