WAEC Economics 2022 Paper

Concept:A consumer of a single commodity is in equilibrium when the marginal utility equals the price of that commodity.Explanation:For a single commodity, the consumer keeps buying until the satisfaction from the last unit equals its cost.This condition is written as:$$MU_x = P_x$$Here, $MU_x$ is the marginal utility of commodity $X$, and $P_x$ is its price.If $MU_x > P_x$, the consumer gains extra satisfaction and buys more.If $MU_x < P_x$, the consumer reduces consumption.Therefore, equilibrium occurs only when $MU_x = P_x$.Answer:C. he equates marginal utility and price