Question

How will a consumer react to the situation when Px falls and your state of equilibrium is distributed for the consumption of good x ​

Answer 1

As a consumer, I strike my equilibrium when :

Px = MUx

In case Px falls , my gain in terms MUx becomes greater than my sacrifice in terms of Px Thus

MUx >Px

Answer 2

hey mate...

here is your answer...

The condition of Consumer's equilibrium is :

MUX(in rupee terms) should be equal to PX.MUX(in rupee terms) should be equal to PX.

As PXPX falls, the consumer's gain related to MUXMUX will be more than the consumer's sacrifice related to PXPX.

Algebraically, MUX > PXMUX > PX.

So, the consumer will purchase more amount of Good X. We know, according to the Law of Diminishing Marginal Utility, if consumer will consume more and more units of Good X at succession, then marginal utility (MUX)MUX derived from the consumption of each additional unit of the good will fall. In order to attain equilibrium, the consumer will not consume more of the units where, MUX = PXMUX = PX.

In short, as PX falls, the consumer will purchase more amount of Good X.

hope it helps...