Unit 2: Elasticity, Consumer Choice, Costs

Lesson 6a: Consumer Decisions: Utility Maximization

Key Formulas

 

marginal utility

 MU = TU / Qconsumed

 

benefit-cost analysis

 MB  = MC

 

utility-maximizing rule

MUa/Pa = MUb/Pb = MUc/Pc = . . .

 

 

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Lesson 6a