Explain Consumer’s Equilibrium with the Help of Indifference Curve Analysis

Meaning of Consumer’s equilibrium

Consumer’s equilibrium is that point in which consumer consumes the combination of two goods by his limited income. He gets maximum satisfaction from these goods and never changes this situation. If he will change this point, his level of satisfaction will decrease.

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What is Law of Diminishing Marginal Utility? What is its Importance?

Definition of Law of Diminishing Marginal Utility

Law of Diminishing marginal utility states that if other things remain constant and if consumer increases the consumption of any product, then marginal utility will decreasing and after sometime it will be negative.

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Cost and its Main Concept Given in Micro Economics

Definition of Cost

Cost means all expenses which incurred for production and operation of business. Cost is importance because without calculating of cost, price of any product can not be calculated. Cost provides the information what price will be fixed after adding some margin. But in Cost accounting and economics, this concept is so important and a student of commerce should now every terms used in cost. After this he will able to calculate the price and making other cost policies to reduce cost and increase revenues.

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Why is the Marginal Cost curve “U” shaped?

Definition of Marginal Cost

Alfred Marshall invented the famous economics word marginal, it means, one more unit. If we produce one more unit of product, the changes in total cost are called marginal cost. The formula of marginal cost is

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Explain Clearly the Law of Variable Proportion and also Tells its Main Reasons

Law of variable proportion states that if we increase one variable resource of production for increasing output , then after some time total production will increase with decreasing proportion and marginal and average production will decrease. In simple world there is no substitute of any resource of production . Marshall says this law as law of agriculture but this law is universal in real sense.

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What is Elasticity of Demand ? Explain its Degrees and Different Methods of Measuring it .

Definition of Elasticity of demand


Elasticity of demand may be defined as percentage changes in demand divided by percentage changes in prices . This is the simple measurement of the changes in the value of demand , if any changes happens in prices . Suppose if Ram purchased fruit 10 kgs at Rs. 5 per kg . If the price of fruit increase by Rs. 1 and demand of Ram decreases by 8 kgs it means demand of Ram is more elastic and its value can be found by elasticity of demand formula

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Learn Law of demand with Video

I have already explain the law of demand but if you are interested to learn law of demand via video , you can learn below .

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