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Market Equilibrium

What is meant...

Question

What is meant by consumer's equilibrium? State its condition in case of a single commodity.

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Solution

Consumer reaches the point of equilibrium when he maximizes his satisfaction from the commodity, given his income and price of the commodity
A consumer strikes his equilibrium when rupee worth of marginal utility actually received by the consumer is equal to marginal utility of money (rupee worth of satisfaction that the consumer wishes to get).
MUX/PX=MUM.

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Q. What do you understand by consumer's equilibrium? Explain consumer's equilibrium in case of a single commodity.

Q. As per _____, a consumer with a single commodity attains equilibrium at a point where MU = Price.

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\frac{M U_{X}}{P_{X}} = M U_{M}

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