With a single product, total utility is maximised when the marginal utility from the next unit consumed is zero (assuming that the budget of the consumer allows this point to be reached.) When multiple products are being chosen, the condition for maximising utility is that a consumer equalises the marginal utility per pound spent. The condition for maximising utility is: MUA/PA = MUB/PB where: MU is marginal utility and P is price.
Revision Video: Utility Maximisation
Revision Video: Concept of Diminishing Marginal Utility
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