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Question
When is the consumer in equilibrium?
Options
MUx = Px
MUx = 0
Px = 1
MUx ≠ Px AE
MCQ
Solution
MUx = Px
Explanation:
A customer is said to be in equilibrium when he optimizes his happiness given his income and commodity prices. This means that the marginal utility of the good equals the price of the product.
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Cardinal Approach (Utility Analysis)
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