coming soon
As mentioned earlier, the ordinal approach states that utility cannot be measured in numbers. Instead, economists use an . What is an Indifference Curve?
If MUx/Px > MUy/Py, the consumer gets more satisfaction per rupee from X. They will buy more of X, causing MUx to fall, and less of Y, causing MUy to rise, until the ratios equalize. They are in equilibrium when this ratio is equal to the (MUₘ).
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. consumer equilibrium class 11 notes free
This occurs because of the Diminishing Marginal Rate of Substitution (MRS) .
In economics, a is an individual who buys goods and services to satisfy their personal wants and needs. The central problem faced by every consumer is scarcity —they have limited income but unlimited wants. As mentioned earlier, the ordinal approach states that
$$MRS_xy = \fracP_xP_y$$
MU of a product = Price of that product (MUx = Px) Condition 2: For two products: MUx / Px = MUy / Py If MUx/Px > MUy/Py, the consumer gets more
The value of money to the consumer remains unchanged.
coming soon
coming soon...
coming soon