Consumer Equilibrium Class 11 Notes Free ((better))

) reaches equilibrium when the marginal utility of the good (in terms of money) equals its market price.

| Units | ( MU_x ) | ( \fracMU_xP_x ) | ( MU_y ) | ( \fracMU_yP_y ) | | :---: | :---: | :---: | :---: | :---: | | 1 | 16 | 8 | 11 | 11 | | 2 | 14 | 7 | 10 | 10 | | 3 | 12 | 6 | 8 | 8 | | 4 | 10 | 5 | 6 | 6 |

The consumer aims to maximize satisfaction.

The want-satisfying power of a commodity. It is subjective and varies from person to person. consumer equilibrium class 11 notes free

He made a mental table (like in the free notes):

To achieve equilibrium, a consumer's preferences must be matched against their financial constraints.

PXPYthe fraction with numerator cap P sub cap X and denominator cap P sub cap Y end-fraction Conditions for Equilibrium under IC Approach ) reaches equilibrium when the marginal utility of

For Indifference Curve analysis, always draw a clear, labeled diagram showing the IC tangent to the budget line.

“I feel perfect,” Rohan said. “No craving for more.”

MUn=TUn−TUn−1cap M cap U sub n equals cap T cap U sub n minus cap T cap U sub n minus 1 end-sub 2. Law of Diminishing Marginal Utility (DMU) It is subjective and varies from person to person

This occurs when a consumer spends all of his income on a single commodity, say 'X'. The consumer is in equilibrium when the marginal utility of the commodity (MUx) is equal to its price (Px). The condition is: $$MU_x = P_x$$

Suppose Price of 1 Apple = ₹4. MU schedule is given.

[ MRS_xy = \fracP_xP_y ] (MRS = Marginal Rate of Substitution = Slope of IC)