(a) P = TU\(_3\) = TU\(_2\) + MU\(_3\) = 19 + 6 = 25
Q = TU\(_6\) = TU\(_5\) + TU\(_6\) = 31 + 0 = 31
R = MU2 = \(\frac{TU_2 - TU_1}{2 - 1}\) = \(\frac{19 - 10}{1}\) = 9
S = MU5 = \(\frac{TU_5 - TU_4}{5 - 4}\) = \(\frac{31 - 30}{1}\) = 1
(b) The consumer attains equilibrium at the 5th level of consumption.
For one commodity, the consumer attains equilibrium when MU = Price.
At the 5th level, MU = M1 and the price is given as $1.00
(c)
(d) The law of diminishing marginal utility states that s a consumer consumes more units of a commodity, the satisfaction derived from each additional unit of the commodity diminishes.
