Economy, asked by bushrafatima7402, 8 months ago

Explain the optimal choice of consumer with the help of diagram

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Answered by siddhi0712
1

The point at which this indifference curve and the budget constraint touch is called the optimum. It relates preferences to consumption expenditures and to consumer demand curves.

The consumer would prefer point A, but he cannot afford that point because it lies above his budget constraint. Goods and services purchased by a consumer that provides the highest level of utility possible is the optimal choice

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