Lecture 6🧠elevate Consumer’s Equilibrium in 2 Situations | Single & Two Commodities | Microeconomics скачать в хорошем качестве

Lecture 6🧠elevate Consumer’s Equilibrium in 2 Situations | Single & Two Commodities | Microeconomics

🧠 Consumer’s Equilibrium – Meaning Consumer’s Equilibrium refers to a situation where a consumer spends his given income in such a way that he gets maximum satisfaction (utility) and has no tendency to change his level of consumption. 📌 Situation 1: Consumer’s Equilibrium in Case of Single Commodity In this case, a consumer spends his income on one commodity only. 🔹 Basis: Law of Diminishing Marginal Utility According to this law, as a consumer consumes more units of a commodity, the marginal utility (MU) derived from each additional unit keeps decreasing. 🔹 Condition of Equilibrium Consumer is in equilibrium when: MU = Price (P) and MU falls after the equilibrium point This means the consumer will continue to buy the commodity as long as MU ≥ Price. Equilibrium is achieved when MU becomes equal to price. 📌 Situation 2: Consumer’s Equilibrium in Case of Two Commodities Here, a consumer spends his given income on two different commodities. 🔹 Basis: Law of Equi-Marginal Utility According to this law, a consumer gets maximum satisfaction when the utility derived from the last rupee spent on each commodity is equal. 🔹 Condition of Equilibrium MU₁ / P₁ = MU₂ / P₂ This means the consumer distributes his income between two commodities in such a way that marginal utility per rupee spent on each commodity is the same. 🎯 Conclusion In single commodity, equilibrium is achieved using MU = Price In two commodities, equilibrium is achieved using Law of Equi-Marginal Utility These concepts help explain consumer behavior and are very important for board exams