Theory of Demand
Quick practice
Question 1 of 5
Assertion (A): A consumer is said to be in equilibrium when they have no incentive to reallocate their budget between different commodities.
Reason (R): At the point of equilibrium, the consumer is deriving the maximum possible total utility from their given income and market prices.
In the light of the above statements, choose the most appropriate answer:
Both (A) and (R) are correct and (R) is the correct explanation of (A).
Both (A) and (R) are correct but (R) is NOT the correct explanation of (A).
(A) is incorrect but (R) is correct.
(A) is correct but (R) is incorrect.
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