Question

What is the consumer's balance? Explain consumer balance with the help of user analysis and positioning.​

Answer 1

Answer:

Consumer's Equilibrium/Balance refers to the situation when a consumer is having maximum satisfaction his limited income and has no tendency to change his existing way of expenditure.

Explanation:

From the figure, we can see that the combinations R, S, Q, T, and H cost the same to the consumer. In order to maximize his level of satisfaction, the consumer will try to reach the highest indifference curve. Since we have assumed a budget constraint, he will be forced to remain on the budget line.