A consumer will buy a new product rather than an existing product:
A. when the MU/P of the new product is less than the MU/P of the existing product.
B. when the substitution of the new product for the old product increases the consumer's total
utility.
C. only if the new product has a lower price than the existing product.
D. only if the MU of the new product exceeds the MU of the existing product.
Answer: B
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a. excludable and rival in consumption. b. excludable and not rival in consumption. c. not excludable and rival in consumption. d. not excludable and not rival in consumption.
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