Question

What is the equilibrium condition for consumer behavior pertaining to goods A and B?

Answer 1

Consumer equilibrium is the decision about how much consumer will consume a number of goods and services. The equilibrium condition for a consumer behaviour pertaining to goods A and B is:

Consumer no is the price of goods A and B and has a fixed budget or income that he can use to purchase quantities of goods A and B. Also keeping in mind that consumer will completely exhausted the budget for such purchase.

Hence the marginal utility per dollar spent on goods a must be equal to the marginal utility per dollar spent on goods be is the the equilibrium condition.

Marginal utility of good A/ price of good A = marginal utility of good B/ price of good B