It is the same as the two-commodity case: a consumer spreads their money over various goods in such a way that the marginal utility of the last dollar spent on each good is the same.
As the consumer acquires more units of Good X, their willingness to sacrifice Good Y decreases. This happens because the intensity of desire for X decreases, while the intensity of desire for the remaining Y increases. Properties of Indifference Curves consumer equilibrium class 11 notes free
: The consumer’s budget and market prices remain constant during the analysis. Diminishing Marginal Utility It is the same as the two-commodity case:
Understanding Consumer Equilibrium is the key to mastering microeconomics. By grasping the concepts of Utility, Budget Lines, and Indifference Curves, you can clearly explain how rational consumers allocate their scarce resources to achieve maximum satisfaction. Properties of Indifference Curves : The consumer’s budget
4. Consumer Equilibrium Under Utility Analysis (Cardinal Approach)