Advertisement Remove all ads

Define Marginal Propensity to Consume - Economics

Advertisement Remove all ads
Advertisement Remove all ads
Advertisement Remove all ads

Define marginal propensity to consume

Advertisement Remove all ads

Solution

Marginal Propensity to Consume (MPC) is the ratio of change in consumption (ΔC) to change in income (ΔY) i.e.`MPC=(DeltaC)/(DeltaY)`

Example:

`DeltaY=Rs500`

`DeltaC=Rs100`

`MPC=c=(DeltaC)/(DeltaY)`

       `=100/500=0.2`

Concept: Consumption Function and Propensity to Save
  Is there an error in this question or solution?

Video TutorialsVIEW ALL [1]

Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×