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What is consumer's equilibrium ? State its condition in case of a single commodity |
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Answer» SOLUTION :Consumer's Equilibrium refers to the SITUATION when a consumer is having maximum satisfaction with limited income and has no tendency to change his way of existing expenditure. The consumer has to pay a price for each unit of the commodity. So, he cannot buy or consume UNLIMITED quantity. In CASE of SINGLE commodity the consumer is in equilibrium when marginal utility of a good in terms of money becomes equal to the price of that good. |
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