What is consumer equilibrium in case of one comodity with diagram and table?
Answers
Consumer's equilibrium is a situation when he spends his given income on the purchase of one or more commodities in such a way that he gets maximum satisfaction and has no urge to change this level of consumption, given the prices of commodities. (B) Condition Of Consumer Equilibrium In Case Of Single Commodity.Feb 15, 2020
FOC for consumer equilibrium has been satisfied at the point of tendency E. At this point the MRSQ1,Q2 = (∂U/∂q1)/(∂U/∂q2) = q2/q1 = 10/25 = 2/5 has been equal to the price ratio p1/p2 = 2/5. As regards the SOC, the derivative of the slope of the IC w.r.t.
☝️HOW TO FIND
A consumer purchasing a single commodity will be at equilibrium, when he is buying such a quantity of that commodity which gives him maximum satisfaction. The number of units to be consumed of the given commodity by a consumer depends on 2 factors. 1. Price of the given commodity.
