Consumer Equilibrium Class 11 Notes Free May 2026

A consumer is an individual who purchases goods and services for the satisfaction of their wants, not for resale or production.

Consumer Equilibrium is a state where a consumer gets maximum satisfaction from their income and has no tendency to change their spending pattern.

Definition: Consumer equilibrium refers to a situation where a consumer spends their given income on a good or a combination of goods in such a way that they derive maximum satisfaction and do not wish to change their consumption.

This is the Ordinal Utility Approach by Hicks and Allen. No numbers; only preferences. consumer equilibrium class 11 notes free

Assumption: The consumer has a fixed income and spends it on two goods (Good X and Good Y). Prices are fixed.

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?

The Law: A consumer will buy apples until: Marginal Utility of Apple (in ₹) = Price of Apple

Formula: [ \fracMU_xMU_m = P_x ] Where MU_m = Marginal Utility of Money (usually assumed = 1) A consumer is an individual who purchases goods

Conditions for Equilibrium:

Example:

As a consumer consumes more units of a good, the additional utility from each successive unit falls. Definition: Consumer equilibrium refers to a situation where

Subject: Economics
Class: 11
Topic: Consumer Equilibrium
Price: Free

[ MRS_xy = \fracP_xP_y ] And the IC must be convex to the origin.