Consumer s equilibrium class 11 economics ppt.pdf

Class 11 economics ppt consumer s equilibrium

1.    Consumer's Equilibrium
       By kinjal singla 
     Class-11 "C1"
    Submitted to : Mrs Uma Sharma
  

2. This presentation aims to
understand the concept of
consumer equilibrium in Class 11
Economics. We will explore the
factors that influence consumer
behavior and decision-making in
the market.
Introduction

3. Consumer Equilibrium
Consumer equilibrium occurs when
the consumer achieves the highest
level of
satisfaction with the given
income and prices. It is achieved at
the point where the budget line is
?ozy2z?e??e?R2eWz+W2?2z$2e$???2i

4. If you're spending your income on coee
and croissants, your consumer equilibrium
is attained when the marginal utility per
???22e??2z?e?ze$?22eW?e2??ooe??e?R2
marginal utility per rupee spent on
croissants.
Example of consumer's
equilibrium

5. The meaning of utility refers to the
ability of a commodity to meet
human needs in economics. Human
needs are satisfied when a
product’s utility is high. As a result,
“utility” is defined as “wants met by
the capability of commodities or
services”.
Utility

6. After we have learned about the meaning of utility,
we will now know the types of it. Basically, there are
two types of utility available, they are:
1.Marginal utility
2.Total utility
Different kinds of utility

7. The relationship between TU
and MU can be properly
understood through the table
beneath. Here, we are
assuming that the consumer is
rational and expects utility
from the consumption of
coee. Each unit is a cup of
$?22if
What is the Relationship
Between Total Utility and
Marginal utility?

8. The Law of Diminishing Marginal Utility states
that the additional utility gained from an
increase in consumption decreases with each
subsequent increase in the level of
consumption. Marginal Utility is the change in
total utility due to a one-unit change in the
level of consumption. The Law of Diminishing
Marginal Utility states the marginal utility
gradually decreases with the level of
consumption, utility being defined as
satisfaction or benefit.
What is the Law of
Diminishing Marginal
Utility?

9. Total Utility is an aggregate measure of
satisfaction gained from consumption, whereas
Marginal Utility is a measure of the change in
satisfaction gained from consumption as a result
of a change in consumption.
MU(x) = TU(x) – TU(x – 1)
The Marginal Utility gained from the xth unit of
$?z??x??W?zeW?e2??ooe??e?R2e+W2?2z$2er2??22z
the total utility gained from x units of
consumption and the total utility gained from x–1
units of consumption.
Total Utility vs. Marginal
Utility

10. The budget line represents
the various combinations
of two goods that a
$?z??x2?e$ozeo??+e?W?R
a given income and prices.
It is a crucial determinant
of consumer equilibrium.
Budget Line

11. Consumer equilibrium is
influenced by preferences for
+W2?2z?ey??+?eoz+e?2??W$2?i
Understanding these
preferences is essential in
analyzing consumer behavior
and market demand.
Consumer Preferences

12. Income and Substitution Effect
Changes in
income and prices
lead to income and substitution
22$??jeWx?o$?Wzye$?z??x2?
equilibrium. It is crucial to
$?x??2R2z+e?R2?2e22$??e??
understand consumer behavior.

13. Consumer equilibrium leads to
the concept of
consumer
surplus
, representing the
+W2?2z$2er2??22ze?Ro?
consumers are willing to pay
and what they actually pay for
a good or service.
Consumer Surplus

14. Importance of Consumer
Equilibrium
Consumer equilibrium is
crucial in analyzing market
dynamics, consumer behavior,
oz+e??2?oooexo?l2?e2$W2z$?i
It provides valuable insights
for businesses, policymakers,
and economists.

15. In conclusion, understanding consumer
equilibrium is essential in comprehending
consumer behavior, market demand, and market
eciency. It plays a pivotal role in shaping
economic decisions and policies.
Conclusion

16. Thanks!
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