How a price change affects consumer optimum?

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter11: Marketing And Distribution
Section11.1: The Charging Role Of Marketing
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How a price change affects consumer optimum?

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Introduction

In consumer's equilibrium, consumer optimum means getting a maximum level of satisfaction after consuming a good. A consumer optimum refers to a situation where a consumer receives the maximum level of satisfaction with his given income and price of the good. The consumer will attain its optimum by choosing that bundle of good which will give him maximum satisfaction or maximum utility.

Explanation

If a consumer's price of good changes the optimum bundle for a consumer or the optimum equilibrium point of a consumer also changes. If the price of a good falls consumer's optimum bundle will be purchasing more of that good. on the other hand if the price of a good increases then the consumer's optimum bundle will be purchasing less of that good.

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