Question

A consumer consumes only two goods. Explain the conditions of the consmers equilibrium with the help of utility analysis. Class11

Answer 1

Utility is a unity of a consumers satisfaction per unity of commodity he or consumes.When a consumer is consuming two different commodities,the equilibrium will be depended on the difference between the taste and preference of of the two commodities and their respective satisfaction.When the quality and quantity of one commodity changes then the consumer will definitely change to the the commodity aiming at gaining his or her equilibrium based on the utils of each commodity he consumes.