If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the third candy bar isA) 25 utility units. B) 20 utility units. C) 5 utility units. D) unknown as more information is needed to determine the answer.

Question

Business

Leah Vang

3 December, 03:30

If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the third candy bar isA) 25 utility units. B) 20 utility units. C) 5 utility units. D) unknown as more information is needed to determine the answer.

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Answers (1)

Know the Answer?

Lance Delgado · Answer 1

The correct answer is option C.

Explanation:

The utility from consuming two candy bars is 20 units.

The utility from consuming three candy bars is 25 units.

The marginal utility of the third candy bar will be the increase in the utility on consuming additional unit of candy bar.

It can be calculated by the utility derived from consuming three bars minus the utility derived from consuming two bars.

Marginal utility of third candy bar

=25 units - 20 units

=5 units

So, the correct answer is 5 units.