**In-Depth Economics Notes on Consumer Equilibrium – Essential for Class 11 Students!**
Achieve a solid understanding of consumer equilibrium with these comprehensive and well-structured notes. Tailored for Class 11 Economics students, these notes cover all the critical aspects of the topic, i...
co ns um er Eq ui lib riu m h a s t u o af fr oa
ch es I
1 C ardi na euti ut yd nalyis →GivenbyMarshall
2 erdinal uility salyris →Gvien br Hicks and Aelr
:1 Consumer: A person uho buy s goo ds f o r the
sat isfa ctio n o f w a n t s . His m a i n
objective is t o get maximum
satisfaction on spending hi s limited
i n c o m eo nv a r i o u s goods a n d
services.
.2 c a r d i n a l Utility Analysis - Un der t h i s a p p r o a c h ,
i t us n e c e s s a r y t o define s a t u f a c t i o n obtained
by a commodity in quantitative terms.
.3 Oxinal
a
Utility
consumer
Analysis I Under this approach,
should r a n k various goods
a n d ser vic es based con his / h e pre fer en ce .
They apfosed the ofinion that satisfaction is
m e a s u r e d i n absolute t e r m s .
.4 Utility I
Want satisfying p o v e r o f a commodity.
In cardinal utility analysis, utility i s
measured in utils.
For ez: One plate of Chole Bhature gives 20 uties
satisfaction.
, Page Na.
.5 Law of Diminishing Marginal Utility I Gosser's Is Law
According to this l a w ; a s w e consume
more a n d more i n i t s o f a com mod ity, the
marginal utility (satisfaction) derived f r o n
add itio nal units kee ps on dec rea sin g.
IMP-
EARN Assumptions o f Lau of DMU→
BRO I consumption of a reasonable quantity I
Rational A reasonable quantity should be taken so as to
tardinal correctly deserve the law o f DMU.
Continous
Quality
2. continous consumption I
consumption o f the comm odity shou ld be
continous so that the lave applies corer tly
16 goods are consumed excatically, marginal
utility m ay / may no t de cr ea se .
3. No chan ge i n Quality →
16 Quality o f a commodity in cr ea se s, th e
consum e r w i l l g et m o re sa ti sf ac ti
on r a m
adational units, which contradicts Law. of
4 R a t i o n a l Consumer 7
Ac ons um er should ibe sen sill e a n d rat ion ae
i n de te rm in in g t h e satisfaction ob ta in ed l e y
consumption of a commatity for proper
working o f DMU. $
5 . l aissdassu
i al M eat uram
med t h a t
en tv
litie
e
tys ti
can t
h
cya
e measured andva
1t nt toma
consumer c a n exhress his satisfaction in ra
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