Economics · Consumer Equilibrium
Which of the following statements correctly explains the condition of consumer equilibrium under Indifference Curve Analysis?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Consumer equilibrium occurs where Average Utility equals Marginal Utility.
- 2Consumer equilibrium occurs where the Indifference Curve is tangent to the Budget Line.✓
- 3Consumer equilibrium occurs where Marginal Utility is zero.
- 4Consumer equilibrium occurs where Total Utility is maximum.
Correct answer
Consumer equilibrium occurs where the Indifference Curve is tangent to the Budget Line.
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