Equi marginal utility
Understand the Problem
The question is asking about the concept of equi-marginal utility, which is a principle in economics that states that consumers will distribute their income among different goods and services in such a way that the last unit of currency spent on each provides the same level of marginal utility.
Answer
Consumers balance resource allocation to equalize marginal utility across goods and maximize total utility.
The Law of Equi-Marginal Utility states that consumers will allocate their resources between goods in such a way that the marginal utility per unit of expenditure is equal across all goods to maximize total utility.
Answer for screen readers
The Law of Equi-Marginal Utility states that consumers will allocate their resources between goods in such a way that the marginal utility per unit of expenditure is equal across all goods to maximize total utility.
More Information
The notion of the equi-marginal utility facilitates consumer decision-making and the efficient allocation of resources, aiming to maximize satisfaction within budget constraints.
Sources
- The web page with info on - Example Source - toppr.com
- Equi-marginal Principle: Definition & Example - StudySmarter - studysmarter.co.uk
- Equimarginal principle - Economics Help - economicshelp.org
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