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The ordinal approach uses indifference curves and budget lines to determine equilibrium without measuring utility in numbers. What is an Indifference Curve (IC)?
: The consumer is getting more satisfaction than the price paid, so they will increase consumption. consumer equilibrium class 11 notes free
The first slice of pizza gives you immense joy; the fifth slice, not so much. 2. Consumer’s Equilibrium: Utility Analysis There are two main scenarios studied in Class 11: A. Single Commodity Case
A curve showing all combinations of two goods that give the consumer the same level of satisfaction [1]. ✅ – Save this page as a PDF or share with classmates
Using Indifference Curve Analysis:
Let's find where the ratios are equal at a lower consumption level. The next best match is: What is an Indifference Curve (IC)
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Calculate ( \fracMU_xP_x ) (Divide MU by 2) and ( \fracMU_yP_y ) (Divide MU by 1).
The total satisfaction derived from consuming all units of a commodity. Marginal Utility (MU):