The consumer reaches equilibrium where the budget line is tangent to the highest possible indifference curve. :

$$\fracMU_xP_x = \fracMU_yP_y = MU_m$$

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In the case of a single commodity, a consumer is in equilibrium when the marginal utility (MU) of the commodity is equal to its price (P). The condition is MUx = Px . If MUx > Px, the consumer will buy more, causing MU to fall until it equals the price. If MUx < Px, the consumer will buy less, causing MU to rise until it equals the price.

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: The consumer values Good X more than the market price dictates. They will substitute X for Y, buying more X. As X increases, MRSXYcap M cap R cap S sub cap X cap Y end-sub falls until it matches the price ratio. If

This is the most common numerical question in Class 11 exams.

There are two primary methods used in Class 11 Microeconomics to study this concept: Cardinal Utility Approach (Marshallian Analysis):

: An economic agent who buys goods and services to satisfy personal wants.