Question

The consumer will be in equilibrium where there is a tangency between price line and indifference curve because at this point: *

2 points

MRS < Price ratio

MRS > Price ratio

MRS = Price ratio

None of these

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Answer 1

Answer:

A consumer attains equilibrium position at the point of tangency of price line and IC because at that point it can achieve maximum utility and he can not go beyond it because income is constant.