Consumer Equilibrium Class 11 Notes Free ((link))

This approach assumes that utility cannot be measured but can be compared. Consumers rank their preferences.

refers to a situation where a consumer achieves the maximum possible satisfaction from their purchases, given their limited income and the prevailing market prices. At this point, the consumer has no desire or tendency to change their existing spending pattern.

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We want MU(_x)/P(_x) = MU(_y)/P(_y) with total spending ≤ ₹22.

When buying a single commodity (Good X), a consumer compares the Marginal Utility of the good ( MUXcap M cap U sub cap X ) with its Price ( PXcap P sub cap X This approach assumes that utility cannot be measured

Core terms include (want-satisfying power), Total Utility (TU) (total satisfaction), and Marginal Utility (MU) (extra satisfaction from one more unit). The Law of Diminishing Marginal Utility states that as consumption rises, MU falls.

The consumer will buy 3 units to reach equilibrium. At this point, the consumer has no desire

A curve showing various combinations of two goods that give the same level of satisfaction.

In the case of a single commodity, a consumer is in equilibrium when the marginal utility (MU) of the commodity is equal to its price (P). The condition is MUx = Px . If MUx > Px, the consumer will buy more, causing MU to fall until it equals the price. If MUx < Px, the consumer will buy less, causing MU to rise until it equals the price.