A condition for consumer utility maximization is

Assessment: WAEC SSCE - Economics - 2012 (Objective) Subject: Economics

Question 1 Report

A condition for consumer utility maximization is

Answer Details
The condition for consumer utility maximization is the equality of the ratio of marginal utilities and the ratio of prices. In simpler terms, this means that a consumer can maximize their satisfaction or utility by allocating their budget in such a way that the additional satisfaction gained from consuming an extra unit of a good (marginal utility) is equal to the price of that good divided by the price of another good. In other words, the consumer should spend their money on goods in such a way that the satisfaction gained from the last dollar spent on each good is the same. By following this condition, the consumer can spend their budget in the most efficient way and achieve the highest level of satisfaction or utility possible.

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning