What is meant by consumer's equilibrium?

Meaning of Consumer's Equilibrium. The term equilibrium literally means a state of balance or stability but in economics it stands for 'best position', 'a position of no change'. It is a state of rest which once reacted has no tendency to change the present position. A consumer is one who buys goods and services for satisfaction of his wants. His aim is to obtain maximum possible satisfaction (utility) from spending his limited income. When he achieves the state of maximum satisfaction, he is said to be in equilibrium. Simply put, consumer's equilibrium means consumers's maximum satisfaction.

Meaning. Consumer's equilibrium refers to a situation under which he spends his given income on purchase of a commodity (or combination of two goods) in such a way that gives him maximum satisfaction and he feels no urge to change. It is a position of rest because he does not want to consume (buy) less or more than that. (Mind, in economics the term 'equilibrium' is used quite frequently such as consumer's equilibrium, producer's equilibrium, equilibrium price, equilibrium level of national income etc.)

There are two alternative approaches — Utility approach and Indifference curve approach — to attain the state of consumer's equilibrium. Again under utility approach consumer's equilibrium is studied in case of one commodity and two commodities. These are discussed in questions that follow.