A consumer consumes only one good. The marginal utility from the good is 60 utils and its price is Rs 7 per unit. Indicate whether the consumer is at equilibrium or not if marginal utility of money for the consumer is 6 utils. What should he do to attain equilibrium ?

A consumer consumes only one good. The marginal utility from the good

1.	A consumer consumes only one good. The marginal utility from the good is 60 utils and its price is Rs 7 per unit. Indicate whether the consumer is at equilibrium or not if marginal utility of money for the consumer is 6 utils. What should he do to attain equilibrium ?
Answer» <P> SOLUTION :A consumer in consumption of single commodity is at equilibrium when: `("Marginal Utility of Commodity " (MU_(X)))/("Marginal Utility of Money " (MU_(M)))` Given: `MU_(X) = 60 " utils, P_(X) = RS 7` per util, `MU_(M) = 6` utils. SUBSTITUTING values, we find that: `(60)/(6) gt 7` Therefore, consumer is not at equilibrium. As marginal utility is GREATER than the price, consumer should INCREASE the level of consumption.