Question
Economics Question on Consumer’s Equilibrium
Suppose a consumer consumes two goods whose MRS = 3. If the price of one good is Rs 30, what is the price of the other good for the consumer to be in equilibrium?
A
10
B
30
C
60
D
90
Answer
10
Explanation
Solution
In consumer equilibrium, the ratio of prices equals the MRS, so the price of the second good is Rs 10.