On which factors Consumer equilibrium is based to be purchase goods and services ? A. Income and Prices B. Quantity and Quality C. Price and Quantity D. Income and Quality
Question
On which factors Consumer equilibrium is based to be purchase goods and services ? A. Income and Prices B. Quantity and Quality C. Price and Quantity D. Income and Quality
Solution
Consumer equilibrium is based on the factors of Income and Prices. So, the correct answer is A. Income and Prices.
Here's why:
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Income: The income of the consumer plays a crucial role in determining the purchasing power. If the income is high, the consumer can afford to buy more goods and services. Conversely, if the income is low, the consumer's purchasing power is limited.
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Prices: The prices of goods and services also significantly impact consumer equilibrium. If the prices are high, the consumer may not be able to buy as much as they would like. On the other hand, if the prices are low, the consumer can afford to buy more.
Therefore, both income and prices are key factors that determine consumer equilibrium.
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