It means that the consumer's equilibrium point is the point of tangency of price line and indifference curve.
At equilibrium, Slope of indifference curve = Slope of budget or price line or MRSXY=PXPY. Also, at point E, IC2 is convex to the origin. Accordingly, equilibrium is stable.
It means that the consumer's equilibrium point is the point of tangency of price line and indifference curve. At equilibrium, Slope of indifference curve = Slope of budget or price line or MRSXY=PXPY. Also, at point E, IC2 is convex to the origin. Accordingly, equilibrium is stable.
Answers & Comments
It means that the consumer's equilibrium point is the point of tangency of price line and indifference curve.
At equilibrium, Slope of indifference curve = Slope of budget or price line or MRSXY=PXPY. Also, at point E, IC2 is convex to the origin. Accordingly, equilibrium is stable.
Answer:
It means that the consumer's equilibrium point is the point of tangency of price line and indifference curve. At equilibrium, Slope of indifference curve = Slope of budget or price line or MRSXY=PXPY. Also, at point E, IC2 is convex to the origin. Accordingly, equilibrium is stable.
Explanation:
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