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 one year ago
For a consumer to be equilibrium why must marginal rate of substitution be equal to the ratio of prices of two goods?
 one year ago
For a consumer to be equilibrium why must marginal rate of substitution be equal to the ratio of prices of two goods?

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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..
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