Consumer equilibrium using utility approach

1.	Consumer equilibrium using utility approach
Answer» When consumers make choices about the quantity of goods and services to consume, it is presumed that their objective is to\xa0maximize total utility.\xa0In maximizing total utility, the consumer faces a number of\xa0constraints, the most important of which are the consumer\'s\xa0income\xa0and the\xa0prices\xa0of the goods and services that the consumer wishes to consume. The consumer\'s effort to maximize total utility, subject to these constraints, is referred to as the\xa0consumer\'s problem.\xa0The solution to the consumer\'s problem, which entails decisions about how much the consumer will consume of a number of goods and services, is referred to as\xa0consumer equilibrium.

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