The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-Consumer equilibrium exists when the marginal utility per dollar of expenditure is the same for all goods and services.

Question

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3
 
-Consumer equilibrium exists when the marginal utility per dollar of expenditure is the same for all goods and services.

Quizplus · Accepted Answer

Consumer equilibrium is achieved when the consumer allocates their budget in such a way that the marginal utility per dollar spent is equal for all goods and services. This condition ensures that the consumer is maximizing their utility given their budget constraint.

The Below Figure Shows the Various Combinations of the Goods