Consumer equilibrium occurs at the point where the slope of the budget constraint is equal to the slope of the indifference curve.

Question

Quizplus · Accepted Answer

Consumer equilibrium is achieved when the slope of the budget constraint (which represents the ratio of the prices of two goods) is equal to the slope of the indifference curve (which represents the marginal rate of substitution between the two goods). This condition ensures that the consumer is maximizing utility given their budget constraints.

Consumer Equilibrium Occurs at the Point Where the Slope of the Budget