Suppose that an ice-cream is sold for Rs 30. Laxmi, who loves ice-cream, has already eaten 3. Her marginal utility from eating the 3^(rd) ice-cream is 90 utils. If MU of Rs 1 is 3 utils, should she eat more ice-creams or should she stop ?

Suppose that an ice-cream is sold for Rs 30. Laxmi, who loves ice-crea

1.	Suppose that an ice-cream is sold for Rs 30. Laxmi, who loves ice-cream, has already eaten 3. Her marginal utility from eating the 3^(rd) ice-cream is 90 utils. If MU of Rs 1 is 3 utils, should she eat more ice-creams or should she stop ?
Answer» SOLUTION :GIVEN: Price `(P_(IC)) = Rs 30`, Marginal UTILITY from eating `3^(rd)`ice-cream = 90 utils. Value of 3 utils = Rs i.e., `MU_(M) = 3`. MU in terms of Money `(MU_(IC)) = (MU " in Utils")/(MU_(M)) = (90)/(3) = 30` Laxmi should not consume any more ice -creasn as the condition for consumer equilibrium `''MU_(IC) = P_(IC)''`is SATISFIED at `3^(rd)` ice-cream.