Consumer equilibrium exists when the
A)slope of the indifference curve is greater than the slope of the budget constraint.
B)consumer is on his highest indifference curve.
C)marginal rate of substitution equals the slope of the budget constraint.
D)slope of the indifference curve equals the slope of the budget constraint.
E)c and d

Question

Quizplus · Accepted Answer

Consumer equilibrium occurs when the marginal rate of substitution (MRS), which is the slope of the indifference curve, equals the slope of the budget constraint. This ensures that the consumer is maximizing utility given their budget.

Consumer Equilibrium Exists When the