Let price of a commodity X be Rs 10. Marginal utility (in terms of money) for 5units is given as

Units

1

2

3

4

5

Mux (Rs)

16

10

4

2

1

How many units should a consumer purchase, so that his satisfaction is maximum?

A consumer attains maximum satisfaction when 

Here, as the price of the commodity is given as Rs 10, so the equality given above is satisfied at 2 units of commodity where is given as 10. Thus, consumer attains maximum satisfaction by consuming two units of the commodity.

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