1 / 5

CONSUMERS EQUILIBRIUM

CONSUMERS EQUILIBRIUM. When a consumer gets maximum satisfaction out of a commodity. This situation is known as consumer equilibrium. .

janine
Download Presentation

CONSUMERS EQUILIBRIUM

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CONSUMERS EQUILIBRIUM When a consumer gets maximum satisfaction out of a commodity. This situation is known as consumer equilibrium.

  2. Utility analysis : 1.Initial utility – which is achieved by the consumption of the first unit of any commodity is called initial utility. 2.Marginal utility – The most important concept of this analysis is that utility gain from the consumption of an extra unit of commodity is called marginal utility. MU=TUn-TUn-1

  3. LAW OF DIMINISHING MARGINAL UTILITY - The law of diminishing marginal utility shows that when consumers consumes many units of a commodity continuosly then then total utility is gain from this increases but this increase in utility is at a diminishing rate.

  4. In difference curve - An indifference curve is a locus of various combination of two commodities which yield the same total satisfaction the consumer. The consumer is indifferent towards any of these combination of the two commodities . Properties -1. an indifference curve slopes downwards from the left to right 2. An indifference curve is convex to the origin 3.IT need not be perllel to each other.

  5. What is utility? What is marginal utility? What is indifference curve? Define consumer equilibrium? What is laws of diminishing marginal utility? i what are the properties of the indifference curve? assignment:=

More Related