Answer to Question #114207 in Microeconomics for umema

Question #114207
A recreational park launches a unique package to attract the customers, e.g. from second ticket onwards
they offer 12 percent discount. Assume that for every activity the first ticket is of Rs. 120.
On the other hand, taking the law of diminishing utility, the customer's marginal utility gets decreased by
5 percent from second activity onwards, assume initial marginal utility is 35 utils.

a. Find the consumer's equilibrium point.
b. Would the maximization of utility different from consumer's equilibrium point, if yes how much?
Expert's answer

a.The consumers equilibrium is where the margibal utility is the same as the price

b.It is not the same .utility is maximaxised where consumer gets maximum satisfaction from economic descions. while consumer is the point where marginal utility is the same as price.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


No comments. Be the first!

Leave a comment

Ask Your question

New on Blog