If the prices of A, B, and C are $2, $3, and $1, respectively, and the consumer has $26 to spend on these three products, what combination of the three products should be purchased in order to maximize utility?
Columns 1 through 3 in the table below show the marginal utility which a particular consumer would get by purchasing various quantities of products A, B, and C.
2 units of A, 6 units of B, and 4 units of C, shown by the fact that: 16/$2 = 24/$3 = 8/$1. The $26 in income is spent.
Economics
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