Question

State condition of consumer's equilibrium.

Solution

In case of a single commodity, consumer's equilibrium is attained when :

(i) Marginal utility in terms of money = Price (MU_x = P_x)

(ii) In case of two commodities, it is attained when :
$fraction numerator MU space of space straight x space commodity over denominator Price space of space straight x end fraction equals fraction numerator Mu space of space commodity over denominator Price space of space straight y end fraction equals MU space of space money$

Some More Questions From Theory Of Consumer Behaviour Chapter

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Theory Of Consumer Behaviour

State condition of consumer's equilibrium.

Some More Questions From Theory Of Consumer Behaviour Chapter

What are two approaches to attain the state of consumer's equilibrium?

Define indifference curve.

What is meant by marginal rate of substitution (MRS)?

Why is MRS always diminishing?

When does a consumer attain equilibrium according to indifference curve approach?

Give meaning of demand.

Name two determinants of demand.

List the factors that cause changes in demand.

What is law of demand?

What is demand schedule?

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