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Explain consumer equibrem in teo case …

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Explain consumer equibrem in teo case commodity?
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Harsh Kumar 6 years, 10 months ago

The term ‘equilibrium’ is frequently used in economic analysis. Equilibrium means a state of rest or a position of no change. It refers to a position of rest, which provides the maximum benefit or gain under a given situation. A consumer is said to be in equilibrium, when he does not intend to change his level of consumption, i.e., when he derives maximum satisfaction. . . . The Law of DMU applies in case of either one commodity or one use of a commodity. However, in real life, a consumer normally consumes more than one commodity. In such a situation, ‘Law of Equi-Marginal Utility’ helps in optimum allocation of his income. . . . According to the law of Equi-marginal utility, a consumer gets maximum satisfaction, when ratios of MU of two commodities and their respective prices are equal and MU falls as consumption increases. It means, there are two necessary conditions to attain Consumer’s Equilibrium in case of Two Commodities
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