Question

Describe three conditions of consumer equilibrium. mux/px=mu/py, mux/px, mux/px mut/py and mux/px mux/py
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Answer 1

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There are three conditions for consumer's equilibrium: This is because, algebraically I = Px X + Py, where I represents the consumer's income, Px and Py the prices of goods X and Y, respectively. This budget equation is the equation of the line connecting the points Q and P, where Q = I /Px and P = I/Py.