A consumer downloads 4 movies and 3 apps per week. Suppose the price is $4 per movie and $4 per app, and the marginal utility this consumption level is 14 for a movie and 8 for an app. Calculate marginal utility per dollar. per movie per app
Marginal utility will be calculated for movies by: 14/(4*4) which would mean 0.875 utils per dollar per movie. Whereas, for apps, it would be: 8/(3*4) which would mean utils per dollar per app to be 0.667. Hence, movies tend to carry higher utility.
