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Who is considered to be a rational consumer? |
who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is equal to utility of money price paid for it. who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is more to utility of money price paid for it. who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is less to utility of money price paid for it. who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is not equal to utility of money price paid for it. |
who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is equal to utility of money price paid for it. |
The correct answer is Option 1: who consumes the commodity up to a point where the marginal utility of the final unit of the commodity is equal to utility of money price paid for it. Rational consumer is one who maximises his satisfaction and that is achieved when the amount of money he pays for the commodity equals to the satisfaction he derives from that commodity. Initially, when the consumer consumes the good, the marginal utility exceeds the price he pays for it, which encourages him to buy more of that commodity. Then gradually with continuous consumption, the marginal utility diminishes due to "Law of diminishing marginal utility". He will consume it to the point where marginal utility of the final unit of the commodity is equal to utility of money price paid for it. |
