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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» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Let <a href="https://interviewquestions.tuteehub.com/tag/us-718298" style="font-weight:bold;" target="_blank" title="Click to know more about US">US</a> first calculate MU in terms of money `(MU_(X))` <br/> Given: <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a> of 5 utils = Rs 1, i.e., `MU_(x) = 5`. We know : `MU_(x) = (MU " in Utils")/(MU_(M))` <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C02_S01_006_S01.png" width="80%"/> <br/> Consumer will purchase 4 units because at `4^(th)` unit, MU = Price. <br/> `**` 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. <br/> `**` Similarly, consumer will not buy more than 4 units as `MU lt` Price and total satisfaction can be <a href="https://interviewquestions.tuteehub.com/tag/increased-1040402" style="font-weight:bold;" target="_blank" title="Click to know more about INCREASED">INCREASED</a> by purchasing less quantity.</body></html>


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