If the marginal utility of commodity is equal to its price, then

If the marginal utility of commodity is equal to its price, then

  1. the consumer is in equilibrium ✓
  2. more of the commodity can be consumed
  3. total utility is also equal to its price
  4. the market is not in equilibrium

Explanation

Consumer equilibrium happens when the last unit bought gives satisfaction equal to its cost. The buyer has no reason to change.

If marginal utility exceeds price, the buyer should consume more. If it is less, consume less.

At equilibrium, the consumer has maximized total satisfaction from their budget.