Maharashtra State BoardHSC Arts 12th Board Exam
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Distinguish Between Average Propensity to Consume and Marginal Propensity to Consume. - Economics

Distinguish between Average propensity to consume and Marginal propensity to consume.

 

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Solution

Average propensity to consume and Marginal propensity to consume. 

Basis of difference Average propensity to consume Marginal propensity to consume
Meaning It shows the ratio of consumption expenditure to the level of income It refers to the ratio of change in the consumption expenditure to the change in the disposable income
Formula `APC=C/Y` `MPC=(ΔC)/(ΔY)`
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