Optimal consumption bundle to maximize utility

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Reference no: EM1315700

The table below shows the marginal utility a costumer would get by purchasing various quantities of A, B, and C. The product prices for A, B, and C are $3, $2, and $1 respectively. The consumer has $20 to spend on the three products. What combination of the three products should be purchased in order to maximize utility?

Unit of product	(1) Marginal utility, A	(2) Marginal utility, B	(3)Marginal utility, C
First	30	22	12
Second	27	20	10
Third	24	18	8
Fourth	21	16	6
Fifth	18	14	4
Sixth	15	12	2

(a) 5 units of A, 6 units of B, and 4 units of C.
(b) 2 units of A, 5 units of B, and 4 units of C.
(c) 3 units of A, 4 units of B, and 3 units of C.
(d) 4 units of A, 3 units of B, and 2 units of C.

Reference no: EM1315700

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