Some people who do not understand the optimal purchase rule argue that if a consumer buys so much of a good that its price equals its marginal utility, the consumer could not possibly be behaving optimally. Rather, they say, the consumer would be better off quitting while ahead or buying a quantity such that marginal utility is much greater than price. (Hint: What opportunity would the consumer then miss? Is it maximization of marginal or total utility that serves the consumer’s interests?)

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Yes it is maximiz... View the full answer