Question

Prepare consumption function if mpc 0.6 and autonomous consumption is rs 70 what will be consumption expenditure at the income of rs300

Answer 1

Consumption Function Formula. The consumption function is calculated by first multiplying the marginal propensity to consume by disposable income. ... As an equation in which C = consumer spending; A = autonomous consumption; M = marginal propensity to consume; D = real disposable income, it is: C = A + MD.