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Levels of satistfaction based on price

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5) Suppose an individual has the utility schedule:

Q UTILITY IN DOLLARS
0 0
1 100
2 180
3 250
4 300
5 340
6 370
7 390
8 400

A)Suppose P=55. What is the individual's optimal level consumption? What is his level of net satisfaction from this good?

B)Suppose p=15. What is the individual's optimal level consumption? What is his level of net satisfaction from this good?

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Solution Summary

The solution discusses how an individual's satisfaction changes with price.

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The consumer always wants to maximize his utility. He will purchase more of a good utility his marginal utility for the next unit purchase will exceed the price. So, we need to consider his ...

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