14. Explain consumers equilibrium, in case of a single commodity, with
the help of a utility schedule and diagram long answer
Answers
Answer:
Consumer's equilibrium refers to a situation in which a consumer gets maximum satisfaction and he has no tendency to bring about any change in his pattern of consumption.
Condition of consumer's equilibrium -: Consumer's equilibrium with respect to purchase of one good is attained when the marginal utility of the good is equal to its price.
Example -: Suppose a consumer is buying orange and the price of each unit of orange is Rs. 4.
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Refer the attachment .
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It is evident from he schedule that the consumer will purchase 4 oranges and reaches an equilibrium position. In this situation, the condition of consumers's equilibrium MU_{X}MU
X
(in Rs.) = P is satisfied. At this level of consumption, the marginal utility is equal to the price of orange, i.e., 4 = 4.
Explanation:
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