JAMB Economics 2024 Paper

Concept:A consumer reaches equilibrium when the extra satisfaction from the last unit equals its price.Explanation:Let $MU$ stand for marginal utility and $P$ stand for price.Marginal utility is the additional satisfaction from consuming one more unit.Price is the cost of buying that unit.When $MU > P$, the consumer gains more satisfaction than the cost, so buying more increases total satisfaction.When $MU < P$, the cost exceeds satisfaction, so buying less improves the consumer's position.Therefore, when $MU = P$, the consumer has no reason to buy more or less.This shows the consumer has maximised total utility from the commodity.Hence, the consumer is in equilibrium.Answer:D. the consumer is in equilibrium