suppose a consumer is purchasing coke (c) and pretzels (p) in quantities such that he is achieving consumer…

suppose a consumer is purchasing coke (c) and pretzels (p) in quantities such that he is achieving consumer equilibrium. then the price of coke increases. which of the following will be true? (note: muc denotes the marginal utility of coke; pc denotes the price of coke.)\n\no muc/pc = mup/pp\n\no muc/pc > mup/pp\n\no we cannot say for certain what will happen to the muc/pc relative to the mup/pp.\n\no muc/pc < mup/pp

suppose a consumer is purchasing coke (c) and pretzels (p) in quantities such that he is achieving consumer equilibrium. then the price of coke increases. which of the following will be true? (note: muc denotes the marginal utility of coke; pc denotes the price of coke.)\n\no muc/pc = mup/pp\n\no muc/pc > mup/pp\n\no we cannot say for certain what will happen to the muc/pc relative to the mup/pp.\n\no muc/pc < mup/pp

Answer

Brief Explanations:

At consumer equilibrium, the ratio of marginal - utility to price is equal for all goods, i.e., $\frac{MUC}{PC}=\frac{MUP}{PP}$. When the price of Coke ($PC$) increases while the marginal utility of Coke ($MUC$) and the marginal - utility to price ratio of pretzels $\frac{MUP}{PP}$ remain unchanged in the short - run, the new ratio $\frac{MUC}{PC}$ will be lower than $\frac{MUP}{PP}$.

Answer:

MUC/PC < MUP/PP