Consumer Equilibrium Class 11 Notes Free ((install)) «2026»

| Units | ( MU_x ) | ( \fracMU_xP_x ) | ( MU_y ) | ( \fracMU_yP_y ) | | :---: | :---: | :---: | :---: | :---: | | 1 | 16 | 8 | 11 | 11 | | 2 | 14 | 7 | 10 | 10 | | 3 | 12 | 6 | 8 | 8 | | 4 | 10 | 5 | 6 | 6 |

Check if the budget is fully spent: Income (M) = (Px × Units of X) + (Py × Units of Y) = (8 × 3) + (4 × 5) = 24 + 20 = ₹44. The budget (M) is given as ₹40, so the expenditure (₹44) exceeds the income. So, this combination is not affordable.

At this point, the slope of the budget line (Px/Py) is equal to the slope of the indifference curve (MRSxy). Therefore, the necessary condition for equilibrium is: consumer equilibrium class 11 notes free

: An economic agent who buys goods and services to satisfy personal wants.

The Budget line must be tangent to the Indifference Curve. Mathematically, this means: | Units | ( MU_x ) | (

An indifference curve shows what a consumer wants to buy, but their shows what they can afford to buy. A budget line represents all the different combinations of two goods a consumer can purchase given their limited income and the market prices of the goods.

: The consumer gets more utility per rupee from Good X. They will buy more X and less Y. As consumption of X increases, MUxcap M cap U sub x falls until equality is restored. If At this point, the slope of the budget

The consumer achieves equilibrium when the marginal utility of the good in terms of money equals its market price:

| Units | MU of Samosa (utils) | MU of Chai (utils) | MU Sam/Price | MU Chai/Price | |-------|----------------------|--------------------|--------------|----------------| | 1st | 30 | 20 | 30/10 = 3 | 20/5 = 4 | | 2nd | 20 | 15 | 20/10 = 2 | 15/5 = 3 | | 3rd | 10 | 10 | 10/10 = 1 | 10/5 = 2 |