A community for students.
Here's the question you clicked on:
← 55 members online
 0 viewing
coolsaurabh
 2 years ago
For a consumer to be equilibrium why must marginal rate of substitution be equal to the ratio of prices of two goods?
coolsaurabh
 2 years ago
For a consumer to be equilibrium why must marginal rate of substitution be equal to the ratio of prices of two goods?

This Question is Open

ANGELNAV
 one year ago
Best ResponseYou've already chosen the best response.1bcoz v need tangency of budget line to the IC for maximising utility, n for that, slopes of both must b equal i.e. MRS(slope of IC)=P1/P2(slope of budget line)

surjeet
 one year ago
Best ResponseYou've already chosen the best response.0In order to maximize utility this condition must be satisfied... and as you know more is better for consumer..
Ask your own question
Sign UpFind more explanations on OpenStudy
Your question is ready. Sign up for free to start getting answers.
spraguer
(Moderator)
5
→ View Detailed Profile
is replying to Can someone tell me what button the professor is hitting...
23
 Teamwork 19 Teammate
 Problem Solving 19 Hero
 Engagement 19 Mad Hatter
 You have blocked this person.
 ✔ You're a fan Checking fan status...
Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.