Economics · Consumer Behaviour and Demand
Read the following statements carefully and choose the correct option: (A) In the Indifference Curve (IC) approach, consumer equilibrium requires that the marginal utility ratio equals the price ratio, and the Marginal Rate of Substitution (MRS) must be increasing at the point of equilibrium. (B) In the utility approach for two commodities, consumer equilibrium is indicated when MUXMUY = PXPY.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Only statement (B) is correct✓
- 2Only statement (A) is correct
- 3Both statements (A) and (B) are correct
- 4Both statements (A) and (B) are incorrect
Correct answer
Only statement (B) is correct
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