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Explain the consumer equilibrium in case of two commodities with help of utility approach |
Answer» In case of two commodities the ratio between MUx and Px and the ratio between MUy and Py is suitable which is symbollically MUx/Px = MUy/PyThis condition is suitable when the equation of budget line Px.Qx+Py.Qy=M is equal to the income of consumer. | |