Consumer Equilibrium Class 11 Notes Free May 2026

Q. A consumer consumes only two goods X and Y. The price of X is ₹5 per unit and the price of Y is ₹10 per unit. The consumer’s income is ₹100. The Marginal Utility schedule is as follows:

| Units | MU_x | MU_y | | :--- | :--- | :--- | | 1 | 50 | 80 | | 2 | 40 | 70 | | 3 | 30 | 60 | | 4 | 20 | 50 | | 5 | 10 | 40 |

Find the equilibrium combination of X and Y. consumer equilibrium class 11 notes free

Solution Hint: Find where ( MU_x / P_x = MU_y / P_y ).
Check Unit 3 of X (( 30/5 = 6 )) and Unit 3 of Y (( 60/10 = 6 )).
Answer: 3 units of X + 3 units of Y.
Budget check: ( (3\times5) + (3\times10) = 15+30 = 45 ) (within ₹100, so consumer saves the rest or buys other goods).

  • Budget Line: A line showing all possible combinations of two goods that a consumer can buy with his given income and prices.

    • Assumption: The consumer has a fixed income and spends it on two goods (Good X and Good Y). Prices are fixed. Budget Line: A line showing all possible combinations

    Condition for Equilibrium: The consumer will distribute their income between X and Y such that the last rupee spent on each good yields equal Marginal Utility.

    Equations:

    Why is this equilibrium?

    Consumer Equilibrium in One Glance:

    | Approach | Condition | Formula | When to use | | :--- | :--- | :--- | :--- | | Single good | ( MU = P ) | ( MU_x = P_x ) | One commodity case | | Two goods (Utility) | Equi-marginal | ( MU_x/P_x = MU_y/P_y ) | Measurable utility | | Ordinal (IC) | Tangency | ( MRS = P_x/P_y ) | Realistic preferences |