When the marginal utility from the consumption of commodity X (Mux) is greater than the price commodity X (Px), a rational consumer should

Step 1: Analyze the question We are asked what a rational consumer should do when the marginal utility of commodity X (MUx) is greater than its price (Px), i.e. MUx > Px.

Step 2: The concept A consumer maximizes satisfaction (reaches equilibrium) for a single commodity when:

MUx = Px

(In money terms, the satisfaction gained from the last unit equals the price paid for it.)

• If MUx > Px: the benefit from one more unit is greater than its cost. The consumer is gaining more than they pay, so buying more makes them better off.
• If MUx < Px: the cost is greater than the benefit, so the consumer should buy less.
• If MUx = Px: equilibrium. The consumer should stay at the same quantity.

Step 3: Apply the law of diminishing marginal utility As the consumer buys more units of X, MUx falls. By consuming more, MUx keeps dropping until it equals Px, and at that point the consumer reaches equilibrium.

Step 4: Check the options

• A. Strive to remain in disequilibrium: wrong, since a rational consumer aims for equilibrium.
• B. Consume the same quantity: wrong, this applies only when MUx = Px.
• C. Consume more of commodity X: correct, because MUx > Px means extra units still add net satisfaction.
• D. Reduce consumption: wrong, this applies when MUx < Px.

Exam tip: Remember "More, Same, Less":

• MU > Price → buy more
• MU = Price → stay the same (equilibrium)
• MU < Price → buy less