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In case of necessaries the marginal utilities of the earlier units are large. In such cases the consumer surplus will be:
- a)Infinite
- b)Zero
- c)Marginally positive
- d)Marginally Negative
Correct answer is option 'A'. Can you explain this answer?
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In case of necessaries the marginal utilities of the earlier units are...
Explanation:
Necessaries are those goods which are essential for human survival, such as food, clothing, and shelter. The marginal utility of the earlier units of such goods is generally high because the first unit satisfies the most urgent need, and subsequent units satisfy less urgent needs.
Consumer surplus is the difference between the price a consumer is willing to pay for a good or service and the actual price paid. In the case of necessaries, the consumer is willing to pay a high price because the good is essential for survival. Therefore, the consumer surplus is very large, and as the marginal utility of these goods is high, the consumer surplus will be infinite.
Infinite Consumer Surplus:
When the marginal utility of a good is high, the consumer is willing to pay more for each additional unit of the good. This means that the consumer surplus will be very large, and as the marginal utility of necessaries is high, the consumer surplus will be infinite.
Conclusion:
In conclusion, when the marginal utility of necessaries is high, the consumer surplus will be infinite. Therefore, the consumer is willing to pay a high price for such goods, and the consumer surplus is very large.
Necessaries are those goods which are essential for human survival, such as food, clothing, and shelter. The marginal utility of the earlier units of such goods is generally high because the first unit satisfies the most urgent need, and subsequent units satisfy less urgent needs.
Consumer surplus is the difference between the price a consumer is willing to pay for a good or service and the actual price paid. In the case of necessaries, the consumer is willing to pay a high price because the good is essential for survival. Therefore, the consumer surplus is very large, and as the marginal utility of these goods is high, the consumer surplus will be infinite.
Infinite Consumer Surplus:
When the marginal utility of a good is high, the consumer is willing to pay more for each additional unit of the good. This means that the consumer surplus will be very large, and as the marginal utility of necessaries is high, the consumer surplus will be infinite.
Conclusion:
In conclusion, when the marginal utility of necessaries is high, the consumer surplus will be infinite. Therefore, the consumer is willing to pay a high price for such goods, and the consumer surplus is very large.
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In case of necessaries the marginal utilities of the earlier units are large. In such cases the consumer surplus will be:a)Infiniteb)Zeroc)Marginally positived)Marginally NegativeCorrect answer is option 'A'. Can you explain this answer?
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