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How many units of a commodity should a consumer buy to get its maximum utility explain with the help of a numerical example?
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How to Determine the Maximum Utility of a Commodity


Consumers want to maximize their utility or satisfaction when buying a commodity. To achieve this, they need to determine the optimal number of units to purchase. Here are the steps to follow to maximize utility:


Step 1: Determine the Marginal Utility


The first step is to determine the marginal utility of each unit of the commodity. Marginal utility refers to the additional satisfaction a consumer gets from consuming one more unit of a good or service.


Step 2: Calculate the Total Utility


The next step is to calculate the total utility of each quantity of the commodity. Total utility refers to the overall satisfaction a consumer gets from consuming a certain quantity of a good or service.


Step 3: Compare the Marginal and Total Utility


Finally, the consumer should compare the marginal and total utility to determine the optimal quantity of the commodity to purchase. The consumer should continue buying units of the commodity as long as the marginal utility is greater than or equal to the price. When the marginal utility becomes less than the price, the consumer should stop buying the commodity.


Numerical Example


Suppose a consumer is considering purchasing cups of coffee. The following table shows the marginal and total utility of each cup:



























Cups of Coffee 1 2 3 4 5
Marginal Utility 10 8 6 4 2
Total Utility 10 18 24 28 30


The price of a cup of coffee is $2. The optimal number of cups to purchase is:



  • Buy 1 cup of coffee: The marginal utility is greater than the price, so the consumer should buy 1 cup.

  • Buy 2 cups of coffee: The marginal utility is still greater than the price, so the consumer should buy 2 cups.

  • Buy 3 cups of coffee: The marginal utility is now less than the price, so the consumer should stop buying coffee.



In this example, the consumer should purchase 2 cups of coffee to maximize their satisfaction.
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Direction: Read the case study given below and answer any three of the questions that follow.The structure of an ecosystem involves a description of the available plant and animal species. From a structural point of view, all ecosystems consist of abiotic and biotic factors. Abiotic factors include rainfall, temperature, sunlight, atmospheric humidity, soil conditions, inorganic substances (carbon dioxide, water, nitrogen, calcium, phosphorus, potassium, etc.). Biotic factors include the producers, the consumers (primary, secondary, tertiary) and the decomposers. The producers include all the green plants, which manufacture their own food through photosynthesis. The primary consumers include herbivorous animals like deer, goats, mice and all plant-eating animals. The carnivores include all the flesh-eating animals like snakes, tigers and lions. Certain carnivores that feed also on carnivores are known as top carnivores like hawks and mongooses. Decomposers are those that feed on dead organisms (for example, scavengers like vultures and crows), and further break down the dead matter by other decomposing agents like bacteria and various microorganisms.The producers are consumed by the primary consumers whereas the primary consumers are, in turn, being eaten by the secondary consumers. Further, the secondary consumers are consumed by the tertiary consumers. The decomposers feed on the dead at each and every level. They change them into various substances such as nutrients, organic and inorganic salts essential for soil fertility. Organisms of an ecosystem are linked together through a food chain. For example, a plant eating beetle feeding on a paddy stalk is eaten by a frog, which is, in turn, eaten by a snake, which is then consumed by a hawk. This sequence of eating and being eaten and the resultant transfer of energy from one level to another is known as the foodchain. Transfer of energy that occurs during the process of a food chain from one level to another is known as flow of energy. However, food-chains are not isolated from one another. For example, a mouse feeding on grain may be eaten by different secondary consumers (carnivores) and these carnivores may be eaten by other different tertiary consumers (top carnivores). In such situations, each of the carnivores may consume more than one type of prey. As a result, the food-chains get interlocked with one another.This inter connecting network of species is known as food web. Generally, two types of food-chains are recognised: grazing food-chain and detritus food chain. In a grazing food-chain, the first level starts with plants as producers and ends with carnivores as consumers at the last level, with the herbivores being at the intermediate level. There is a loss of energy at each level which may be through respiration, excretion or decomposition. The levels involved in a food chain range between three to five and energy is lost at each level. A detritus food-chain is based on autotrophs energy capture initiated by grazing animals and involves the decomposition or breaking down of organic wastes and dead matter derived from the grazing food-chain.Q. Biotic factors includes

Direction: Read the case study given below and answer any three of the questions that follow.The structure of an ecosystem involves a description of the available plant and animal species. From a structural point of view, all ecosystems consist of abiotic and biotic factors. Abiotic factors include rainfall, temperature, sunlight, atmospheric humidity, soil conditions, inorganic substances (carbon dioxide, water, nitrogen, calcium, phosphorus, potassium, etc.). Biotic factors include the producers, the consumers (primary, secondary, tertiary) and the decomposers. The producers include all the green plants, which manufacture their own food through photosynthesis. The primary consumers include herbivorous animals like deer, goats, mice and all plant-eating animals. The carnivores include all the flesh-eating animals like snakes, tigers and lions. Certain carnivores that feed also on carnivores are known as top carnivores like hawks and mongooses. Decomposers are those that feed on dead organisms (for example, scavengers like vultures and crows), and further break down the dead matter by other decomposing agents like bacteria and various microorganisms.The producers are consumed by the primary consumers whereas the primary consumers are, in turn, being eaten by the secondary consumers. Further, the secondary consumers are consumed by the tertiary consumers. The decomposers feed on the dead at each and every level. They change them into various substances such as nutrients, organic and inorganic salts essential for soil fertility. Organisms of an ecosystem are linked together through a food chain. For example, a plant eating beetle feeding on a paddy stalk is eaten by a frog, which is, in turn, eaten by a snake, which is then consumed by a hawk. This sequence of eating and being eaten and the resultant transfer of energy from one level to another is known as the foodchain. Transfer of energy that occurs during the process of a food chain from one level to another is known as flow of energy. However, food-chains are not isolated from one another. For example, a mouse feeding on grain may be eaten by different secondary consumers (carnivores) and these carnivores may be eaten by other different tertiary consumers (top carnivores). In such situations, each of the carnivores may consume more than one type of prey. As a result, the food-chains get interlocked with one another.This inter connecting network of species is known as food web. Generally, two types of food-chains are recognised: grazing food-chain and detritus food chain. In a grazing food-chain, the first level starts with plants as producers and ends with carnivores as consumers at the last level, with the herbivores being at the intermediate level. There is a loss of energy at each level which may be through respiration, excretion or decomposition. The levels involved in a food chain range between three to five and energy is lost at each level. A detritus food-chain is based on autotrophs energy capture initiated by grazing animals and involves the decomposition or breaking down of organic wastes and dead matter derived from the grazing food-chain.Q. This interconnecting network of species is known as

Direction: Read the case study given below and answer any three of the questions that follow.The structure of an ecosystem involves a description of the available plant and animal species. From a structural point of view, all ecosystems consist of abiotic and biotic factors. Abiotic factors include rainfall, temperature, sunlight, atmospheric humidity, soil conditions, inorganic substances (carbon dioxide, water, nitrogen, calcium, phosphorus, potassium, etc.). Biotic factors include the producers, the consumers (primary, secondary, tertiary) and the decomposers. The producers include all the green plants, which manufacture their own food through photosynthesis. The primary consumers include herbivorous animals like deer, goats, mice and all plant-eating animals. The carnivores include all the flesh-eating animals like snakes, tigers and lions. Certain carnivores that feed also on carnivores are known as top carnivores like hawks and mongooses. Decomposers are those that feed on dead organisms (for example, scavengers like vultures and crows), and further break down the dead matter by other decomposing agents like bacteria and various microorganisms.The producers are consumed by the primary consumers whereas the primary consumers are, in turn, being eaten by the secondary consumers. Further, the secondary consumers are consumed by the tertiary consumers. The decomposers feed on the dead at each and every level. They change them into various substances such as nutrients, organic and inorganic salts essential for soil fertility. Organisms of an ecosystem are linked together through a food chain. For example, a plant eating beetle feeding on a paddy stalk is eaten by a frog, which is, in turn, eaten by a snake, which is then consumed by a hawk. This sequence of eating and being eaten and the resultant transfer of energy from one level to another is known as the foodchain. Transfer of energy that occurs during the process of a food chain from one level to another is known as flow of energy. However, food-chains are not isolated from one another. For example, a mouse feeding on grain may be eaten by different secondary consumers (carnivores) and these carnivores may be eaten by other different tertiary consumers (top carnivores). In such situations, each of the carnivores may consume more than one type of prey. As a result, the food-chains get interlocked with one another.This inter connecting network of species is known as food web. Generally, two types of food-chains are recognised: grazing food-chain and detritus food chain. In a grazing food-chain, the first level starts with plants as producers and ends with carnivores as consumers at the last level, with the herbivores being at the intermediate level. There is a loss of energy at each level which may be through respiration, excretion or decomposition. The levels involved in a food chain range between three to five and energy is lost at each level. A detritus food-chain is based on autotrophs energy capture initiated by grazing animals and involves the decomposition or breaking down of organic wastes and dead matter derived from the grazing food-chain.Q. The decomposers feed on the dead at which level?

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How many units of a commodity should a consumer buy to get its maximum utility explain with the help of a numerical example?
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