Answer :
Lisa should not change the consumption of any product.
Marginal utility determines how much the consumer is getting satisfaction with an increase or decrease in the quantity. Thus, Marginal utility is equal to total utility divided by quantity.
Marginal utility-price ratio determines the satisfaction which is derived from the last money spent.
According to this ques,
Marginal utility of compact disc = 30
Price of compact disc = $15
Marginal utility of downloadable game = 10
Price of downloadable game = $5
Marginal utility-price ratio = Marginal utility ÷ Price
Thus,
Marginal utility-price ratio of compact disc = 30 ÷ $15 = 2
Marginal utility-price ratio of downloadable game = 10 ÷ $5 = 2
As the marginal utility - price ratio of both the products is same, thus, there is no need to increase or decrease the consumption of any product. If it would have been different then, there was a need to increase or decrease the consumption of any product as the case would be. This is because the marginal utility-price ratio should be the same for both products due to law of diminishing marginal utility.
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Answer:Lisa shouldn't alter her product consumption in any way
Explanation: The consumer's level of satisfaction with an increase or decrease in quantity is measured by marginal utility. As a result, marginal utility is calculated by dividing total utility by quantity.
The marginal utility-price ratio establishes the level of satisfaction attained from the most recent financial transaction.
In light of this question,
Compact disc marginal utility = 30
The cost of a CD is $15.
Game's marginal utility is equal to 10.
$5 is the cost of the game.
Price to marginal utility ratio = Price to marginal utility
Thus,
Compact disc's marginal utility-price ratio is 30/15, or 2.
The downloadable game's marginal utility-price ratio is 10 x $5, or 2.
There is no need to raise or lower the price of either product because their marginal utility to price ratios are equal.
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