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Explain consumer's equilibrium, in case of single commodity, with the help of utility schedule |
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Answer» The two conditions are : (i) The ratio of marginal utility to price is same in case of all the goods consumed. Suppose the consumer consumes only two goods x and y then MUx / Px=MUy / Py (ii) Marginal utility has a tendency to fall as more and more units are consumed. Or simply, A consumer's equilibrium depends upon three factors : (i) MU of a product, |
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