Consumer Equilibrium is a state of balance where a consumer derives maximum satisfaction
A consumer reaches equilibrium when the ratio of MU to price is the same for all goods. (Marginal Utility of Money) 3. The Indifference Curve (IC) Approach (Ordinal Utility) consumer equilibrium class 11 notes free
In this article, we provide exactly that. These notes cover the and the Indifference Curve Approach (Ordinal Utility) , along with formulas, diagrams, and key learning outcomes. Consumer Equilibrium is a state of balance where
| Approach | Condition | Formula | When to use | | :--- | :--- | :--- | :--- | | Single good | ( MU = P ) | ( MU_x = P_x ) | One commodity case | | Two goods (Utility) | Equi-marginal | ( MU_x/P_x = MU_y/P_y ) | Measurable utility | | Ordinal (IC) | Tangency | ( MRS = P_x/P_y ) | Realistic preferences | These notes cover the and the Indifference Curve
This is the foundation of consumer equilibrium.
| Units | MU_x | MU_y | | :--- | :--- | :--- | | 1 | 50 | 80 | | 2 | 40 | 70 | | 3 | 30 | 60 | | 4 | 20 | 50 | | 5 | 10 | 40 |