This modern approach assumes consumers can their preferences rather than measure them numerically. Consumer Equilibrium in Class 11 Economics | PDF | Utility
5. Consumer Equilibrium: Ordinal Approach (Indifference Curve Analysis) consumer equilibrium class 11 notes free
Known as the Law of Equi-Marginal Utility . Equilibrium happens when the ratio of MU to price is equal for all goods: This modern approach assumes consumers can their preferences
Consumer equilibrium occurs when a consumer achieves maximum satisfaction Equilibrium happens when the ratio of MU to
| Units | MU(_x) | MU(_x)/P(_x) | MU(_y) | MU(_y)/P(_y) | | :--- | :--- | :--- | :--- | :--- | | 1 | 20 | 10 | 24 | 6 | | 2 | 18 | 9 | 22 | 5.5 | | 3 | 16 | 8 | 20 | 5 | | 4 | 14 | 7 | 18 | 4.5 | | 5 | 12 | 6 | 16 | 4 |
Assumption: The consumer has a fixed income and spends it on two goods (Good X and Good Y). Prices are fixed.