Question

explain the consumer equilibrium by using the indifference curve analysis​

Answer 1

Answer:

Consumers equilibrium is the amount of goods the consumer can buy in the market given his/her current level of income.

There are two conditions for consumers equilibrium:

1) The first is that the budget line should tangent to the indifference curve or marginal rate of substitution of good X for Good Y (MRS xy) must be equal to the price ratio . i.e MRS x y = Px /P y

2) The indifference curve should be convex to the origin at the point of tangency. ☺☺