What is Marginal Utility and Law of Diminishing Marginal Utility?

CONSUMER’S EQUILIBRIUM – MEANING OF UTILITY, MARGINAL UTILITY, LAW OF DIMINISHING MARGINAL UTILITY.

Consumer Equilibrium

CBSE Class 12 Economics : Equilibrium refers to maintaining a balance between the two variables at the same level. A consumer is considered to be at the state of equilibrium when he gets the maximum amount of satisfaction, for the number of products and services he is willing to purchase at present level of income and current level of price. It is the point consumer gets the maximum amount of Utility.

In order to understand the concept of consumer Equilibrium, it is important to understand Utility, Total Utility, marginal utility, the law of diminishing marginal returns etc

Utility

Utility refers capacity of a commodity to satisfy the human wants or power of a commodity to satisfy the consumer. It refers to the amount of satisfaction consumer gets from the purchase of goods and services

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