Consumer: Equilibrium Class 11 Notes Free New!

We look for equality: ( \fracMU_xP_x = \fracMU_yP_y )

Consumption must be continuous without time gaps.

The consumer reaches equilibrium at the point where the . Conditions for IC Equilibrium: (Slope of IC = Slope of Budget Line) MRSxycap M cap R cap S sub x y end-sub consumer equilibrium class 11 notes free

To get more units of one good, the consumer must give up some units of the other good to keep satisfaction constant.

from their limited income at given market prices and has no tendency to change their existing expenditure We look for equality: ( \fracMU_xP_x = \fracMU_yP_y

The value or "importance" of money remains constant for the consumer.

is a state where a consumer gets maximum satisfaction from their income and has no tendency to change their spending pattern. from their limited income at given market prices

Marginal Utility is the additional satisfaction gained from consuming one extra unit of a commodity.