Question

Given constant prices, the consumer is said to be in equilibrium with respect to purchase of different commodities when he has:

• A. Further tendency to substitute one commodity for another
• B. No tendency to substitute one commodity for another
• C. Obtained minimum possible satisfaction from the commodities
• D. None of the above

Answer 1

Answer: (B)

No tendency to substitute one commodity for another

When a consumer is in equilibrium position then he has no tendency to substitute one commodity for another, and has attained maximum possible satisfaction given the prices and his income.