The equilibrium depends on the number of commodities being consumed:
A consumer allocates money between two goods (X and Y) so that: [ \fracMU_xP_x = \fracMU_yP_y = MU_m \ (\textMarginal Utility of Money) ] consumer equilibrium class 11 notes free
A consumer is in equilibrium at the point where the Budget Line is to the Indifference Curve. Necessary Conditions: The equilibrium depends on the number of commodities
As a consumer consumes more units of a good, the additional utility from each successive unit falls. consumer equilibrium class 11 notes free
The additional satisfaction gained from consuming one more unit of a commodity. Formula: The Law of Diminishing Marginal Utility (DMU)