★ Must-know
📌 The consumer continues buying as long as the pleasure from the last unit is greater than or equal to its cost.
Further detail
Comparing marginal pleasure with price leads to continued or stopped purchasing.
1. What does the rationality hypothesis assume that a consumer seeks to do?
2. What does marginal utility measure for a consumer?
3. When will a consumer continue buying an additional unit of a good?
What does the rationality hypothesis state about consumer behavior?
Consumers seek to maximize satisfaction while minimizing expenditure.
What is marginal utility in consumer theory?
It is the utility of the last unit purchased by the consumer.
When does a consumer continue buying a product?
As long as the pleasure from the last unit is at least equal to its cost.
Why does a customer accept the fourth portion despite decreased pleasure?
Because it costs only one euro more, which the customer is willing to pay.
What is a market in economics?
A space where economic agents meet and supply and demand connect.
What does individual quantity represent?
The quantity chosen by a single buyer or seller at a given price.
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