Question

Plzzzzz fast guys

explain consumer equilibrium with the help of indifference curve approach use diagram.

Answer 1

Answer:

Introduction

A consumer is said to be in equilibrium when he maximises his satisfaction with his given income,tastes and prices of two goods.

Assumptions

1. The consumer has an "Indifference map" showing his 'scale of preferences' that will remain constant throughout the analysis.
2. There will be no change in the money income of consumer.
3. The prices of two goods are given and will remain unchanged.
4. There is no change in the tastes and habits of the consumer.
5. The consumer is rational and thus maximizes his satisfaction.

Conditions for Equilibrium

The consumer is Said to be in equilibrium, when he maximizes his satisfaction with given income,tastes and prices of the two goods. Two conditions must be satisfied for the consumer to be in equilibrium. They are

1. At the point of equilibrium , the budget or price line must be tangent to the indifference curves.
2. At the point of equilibrium, the consumers MRS and price ratio must be equal.

MRSxy = Px/Py

Answer 2

Answer:

Hey Shreen here is your answer ☺ :

Consumer equilibrium = Every consumer aims at a spending his income in a way that gives him maximum satisfaction. When a consumer gets maximum satisfaction from his expenditure ,he is said to be in equilibrium consumers ,equilibrium means maximum satisfaction level consumer can attain at given income and prices .

Hope it helpful to uh if uh satisfied than please mark me as brainlest ☺✌