Case B: Two or More Commodities (Law of Equi-Marginal Utility)
In everyday terms, a consumer is someone who buys goods and services to satisfy their wants. In economics, we study how that consumer decides to spend their limited income on different goods to get the . This state of maximum satisfaction is called Consumer’s Equilibrium . 1. Core Concepts: Utility Before reaching equilibrium, we must understand Utility . Definition: The want-satisfying power of a commodity. Measurement: Measured in imaginary units called Utils . consumer equilibrium class 11 notes free
A consumer is in equilibrium when the Marginal Utility (in terms of money) equals the Price of the good. (Where MUxcap M cap U sub x is Marginal Utility of good X, Pxcap P sub x is Price, and MUmcap M cap U sub m is Marginal Utility of Money). : Consumer keeps buying more. : Consumer reduces consumption. Case B: Two or More Commodities (Law of