Following is the utility schedule of a person: {:("Units of x consumed",1,2,3,4,5,),("MU (in utils)",50,40,30,20,10,):} Suppose that the connodity is sold for Rs 4 and MU of one rupee is 5 utils. How many units of the commodity will the person purchase to maximise his satisfaction ?

Following is the utility schedule of a person: {:("Units of x consume

1.	Following is the utility schedule of a person: {:("Units of x consumed",1,2,3,4,5,),("MU (in utils)",50,40,30,20,10,):} Suppose that the connodity is sold for Rs 4 and MU of one rupee is 5 utils. How many units of the commodity will the person purchase to maximise his satisfaction ?
Answer» SOLUTION :Let US first calculate MU in terms of money `(MU_(X))` Given: VALUE of 5 utils = Rs 1, i.e., `MU_(x) = 5`. We know : `MU_(x) = (MU " in Utils")/(MU_(M))` Consumer will purchase 4 units because at `4^(th)` unit, MU = Price. `` The consumer will not purchase less than 4 units as `MU gt` Price and there is scope for increasing the total satisfaction by purchasing more units. `` Similarly, consumer will not buy more than 4 units as `MU lt` Price and total satisfaction can be INCREASED by purchasing less quantity.