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Consumer Equilibrium Project File

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7 views1 page

Consumer Equilibrium Project File

Uploaded by

jiyankayadav8
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Consumer Equilibrium - Creative Project File

Definition: Consumer equilibrium is the point where a consumer gets maximum


satisfaction from spending a given income.

Mind Map
Consumer Equilibrium
├─ Consumer
├─ Wants
├─ Budget
├─ Utility
│ ├─ Total Utility
│ └─ Marginal Utility
├─ Law of Diminishing Marginal Utility
└─ Equilibrium: MU/Price equal for all goods

Flow Chart
Need → Budget → Choose Goods → Compare MU/Price → Adjust Purchase → Maximum
Satisfaction (Equilibrium)

Key Definitions
• Utility: Satisfaction from consuming a good.

• Total Utility: Total satisfaction from all units consumed.

• Marginal Utility: Extra satisfaction from one more unit.

• Budget: Money available for spending.

• Consumer Equilibrium: Maximum satisfaction without exceeding budget.

Conditions
1. MUx/Px = MUy/Py
2. Entire income is spent.

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