Law of equiproportional marginal benefit

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The law of equiproportional marginal benefit recognizes that a rational consumer maximizes his utility by spending each dollar in a way to maximize marginal utility for that dollar. For such a consumer, the marginal utility of every good divided by that good’s price must be equal:

MUx/Px = MUy/Py = MUz/Pz

where MUx is the marginal utility of good “x” and Px is the price of good “x”.

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