Question

What are the conditions of consumer equilibrium under i.C approach? What changes will take place if the conditions are not satisfied to reach equilibrium?

Answer 1

Thus the consumer's equilibrium under the indifference curve theory must meet the following two conditions: First: A given price line should be tangent to an indifference curve or marginal rate of satisfaction of good X for good Y (MRSxy) must be equal to the price ratio of the two goods.