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The consumer will be in equilibrium where there is tangency between price line and indifference curve because at this point __________ is equal to Price Ratio.

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Question

The consumer will be in equilibrium where there is tangency between price line and indifference curve because at this point __________ is equal to Price Ratio.

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Solution

The consumer will be in equilibrium where there is tangency between price line and indifference curve because at this point marginal rate of substitution is equal to Price Ratio.

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Chapter 2: Consumer's Equilibrium - OBJECTIVE QUESTIONS [Page 2.43]

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Sandeep Garg Introductory Microeconomics [English] Class 11
Chapter 2 Consumer's Equilibrium
OBJECTIVE QUESTIONS | Q 11. | Page 2.43
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