Business, 04.04.2020 03:17 jaylynC

The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium

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Answer from: whittingtondee7084

The correct question is as follows:

The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium

a. $8 and $12

b. $6 and $4

c. $16 and $9

d. $4 and $6

The set of prices which would be consistent with consumer equilibrium will be: Choice B: $6 and $4 respectively.

Discussion:

Marginal utility of the last unit of apples consumed = 12unitsMarginal utility of the last unit of bananas consumed = 8units

The market price for apples and bananas which, will be consistent with the consumer's equilibrium can be evaluated as follows;

Since; 12/ 8 = 3/2and $6/$4 = 3/2.We can say $6 and $4 are the set of prices for apples and bananas, respectively, which would be consistent with consumer equilibrium.

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The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last...