A consumer spends his entire income on two goods:X and Y.Currently his marginal rate of substitution of XandY is mare than the price ratio of two goods . Discuss the changes that will take place so that consumer is able to reach the equilibrium position.
Answers
Answered by
1
mrsX/mrsY>x/y
AS consumer increases the consumption of good Y his tendency of subsituting less and less unit of X for an additonal unit of Y acc law of diminishing marginal utility the mrs of X tends to decrease until MrsX=MrsY
BRO IF YOU WANT THE ANSWER TO THIS CONSUMER EQUILIBRIUM QUESTION THEN PLEASE WRITE IT ON ECONOMICS SECTION
welcome:)
Similar questions