Explain the condition of consumer\' s equilibrium under indifference c

1.	Explain the condition of consumer\' s equilibrium under indifference curve approach
Answer» According to the indifference curve analysis, consumer\'s equilibrium is at a point where the slope of the indifference curve is equal to the slope of the budget line or the price line.The conditions of the consumer\'s equilibrium are\tThe\xa0given price line should be tangent to an\xa0indifference curve\xa0or marginal rate of satisfaction of good X for good Y (MRSxy) must be equal to the price ratio of the two goods. i.e.{tex}\\operatorname { MRS } _ { x y } = \\frac { P _ { x } } { P _ { y } }{/tex}, where\tMRSxy = Marginal Rate of Substitution of good X and good Y\tPx = Price of good X\tPy = Price of good Y, and\tAt the point of equilibrium, the indifference curve must be convex to the origin. It implies that at the point of equilibrium, MRS must be diminishing.\t\tIn the diagram given, P is the equilibrium point at which budget line touches the Indifference Curve IC2.\tThe consumer’s consumption decision is explained by combining the budget line and the indifference map

Explain the condition of consumer\' s equilibrium under indifference curve approach