Cecilia is consuming her optimal consumption bundle of slices of pizza and pepsi cola cans. The...

Cecilia is consuming her optimal consumption bundle of slices of pizza and pepsi cola cans. The marginal utility of her last slice of pizza was 75 utils, and each pizza costs $3. Her marginal utility of her last pepsi cola can was 100 utils. The price of a pepsi cola can is $_____.

Solutions

Expert Solution

From the above explanation and calculation it's clear that the price of pepsi cola can is $4.

At optimal consumption level per $ marginal utility of both the products should be equal.

(MUx/Px)=(MUy/Py)

The ratio of Marginal utility of Commodity X to its price should be equal to The Ratio of Marginal utility of commodity Y to its price.

Rahul Sunny answered 1 year ago

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