Question

conditions of consumer equilibrium using marginal utility analysis single commodity case

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Answer 1

Answer:

Equilibrium Condition:

If MUX > Px, then consumer is not at equilibrium and he goes on buying because benefit is greater than cost. As he buys more, MU falls because of operation of the law of diminishing marginal utility. When MU becomes equal to price, consumer gets the maximum benefits and is in equilibrium.