Question

How does a consumer reach equilibrium position when he is buying only one commodity? Explain with the help of marginal utility schedule.

Answer 1

When a consumer is purchasing one com­modity , he stops buying when its price and utility have been equated.

Meaning the marginal utility is equal to the price.

At this point, his total utility is the maximum.

He is said to be in equilibrium at this point, because he is getting maximum satisfaction and he will buy neither more nor less

Answer 2

Equilibrium is a point where the quantity demanded is equal ti the quantity supplied with the constant price. hen a consumer is buying one commodity and the marginal utility rate is constant meaning that the consumer consumes that product daily its equilibrium is reached by comparing the rate of demand and supply at that particular time.

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