Question

Points K and T will NOT be attained by the consumer. Select the reason from the options given below.

Options

• K does not lie on any IC and entire money is not spent at T.

• K is beyond the financial capacity of the consumer and T provides a lower level of satisfaction.

• Equilibrium should be unique and that is point E.

• K gives more of both the goods A and B and T gives less B.

Answer 1

K is beyond the financial capacity of the consumer and T provides a lower level of satisfaction.