Question

What is consumer euilibrium?Give example. ​

Answer 1

hello..

Consumer's equilibrium refers to a situation when a consumer maximises his satisfaction, spending his given income across different goods and services.

Examples :
One commodity case -
(Say commodity -X ) is struck when
MUx =Px

A consumer is in equilibrium when , given his income and market prices, he plans his expenditure on different goods and services in such a manner that he maximises his total satisfaction.


hope it helps..

Answer 2

$\huge\bf\mathscr\pink{Your\: Answer}$

♠ CONSUMER EQUILIBRIUM

=> The state of balance achieved by an end user of products that refers to the amount of goods and services they can purchase given their present level of income and the current level of prices.

=> Consumer equilibrium allows a consumer to obtain the most satisfaction possible from their income.

♠ Example

=> To know how the consumer equilibrium condition determines the quantity of goods 1 and 2 that the consumer demands,

suppose that the price of good 1 is ₹5 per unit and the price of good 2 is ₹3 per unit. Suppose also that the consumer has a budget of ₹9.

=> The marginal utility ( MU) that the consumer receives from consuming 1 to 4 units of goods 1 and 2 is found.

=> Here, marginal utility is measured in fictional units called utils, which serve to quantify the consumer's additional utility or satisfaction from consuming different quantities of goods 1 and 2.

=> The larger the number of utils, the greater is the consumer's marginal utility from consuming that unit of the good.