# Define Marginal Propensity to Consume - Economics

Define marginal propensity to consume

#### 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
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