Question

With the aid of appropriate diagram describe consumer equilibrium

Answer 1

Answer:

Consumer's Equilibrium (With Diagram) ... A rational consumer will purchase a commodity up to the point where price of the commodity is equal to the marginal utility obtained from the thing. If this condition is not fulfilled the consumer will either purchase more or less.

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Answer 2

Explanation:

• A client is stated to be in equilibrium when he feels that he “cannot change his circumstance either by earning more or by way of spending more or by means of changing the portions of issue he buys”. A rational consumer will purchase a commodity up to the factor in which the rate of the commodity is same to the marginal application obtained from the issue.
• If this circumstance isn't fulfilled the customer will either purchase extra or less. If he purchases greater, MU will pass on falling and a scenario will broaden wherein the price paid will exceed MU. In order to avoid terrible application, i.e., dissatisfaction, he will lessen intake and MU will pass on increasing till P = MU.
• On the alternative hand, if MU is more than the charge paid, the consumer will revel in surplus pride from the units he has already consumed. This will induce him to buy extra and greater devices of the commodity leading to successive fall in MU till it is equated to its price. Thus, by a technique of trial and error — via buying greater or fewer devices, a consumer will ultimately settle at the factor wherein P = MU. Here, his is total software is maximum.

To learn more:

i)Consumer definition and explanation for economics

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ii)why is consumer equilibrium important to the economics

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