Does rule of equal marginal utility per dollar spent hold

Reference no: EM131020644

Consider two goods: pizza and Coke. Along an individual's demand curve for pizza, as the price of pizza falls, does the marginal utility per dollar spent on pizza always equal the marginal utility per dollar spent on Coke? In other words, does the rule of equal marginal utility per dollar spent hold as the price changes and you move up or down the demand curve? How can the rule hold given that the price of pizza changes along the demand curve? If you need help to answer this problem, look back at the discussion of Figure 10.2 on deriving the demand curve for pizza.

Reference no: EM131020644

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