Consumer Equilibrium - Theory and Practice

Each person, as he grows up, goes through social adaptation, merging into various social, economic and other relationships. From a certain age, he can visit stores, outlets, becoming a direct buyer, consumer of a particular product. The older a person becomes, the wider the range of products that he can theoretically acquire. And the higher and more stable his financial position, the more diverse his needs and requirements, the more extensive his purchasing opportunities. In this connection, economics employs a term such as consumer equilibrium.

What is included in this concept? According to the rule, the consumer's equilibrium is a kind of point of maximum utility of the goods purchased by him. For example, a person receives a certain income, expressed in a certain amount of money. Part of this amount, he can spend on the purchase of a thing, say, a suit. The costume he needs a specific size, a certain style, colors, manufacturer's company. The price of the thing is fixed - the consumer can not spend on buying more than what he has allocated from available funds. And the balance of the consumer is such a time when from the variety of the goods he finds exactly the one that will meet all of his needs, will satisfy both the price, the quality of the material, the sewing, the way the thing will sit on it, how easily he can take it From the store, etc. Ie, when the consumer understands: this thing is what he needs, when he needs and for how much he needs. Buying this product, he will experience the effect of satisfaction on how and what he spent his money, spent his income.

The equilibrium of the consumer can be expressed in fractional equations, where the numerator will be the variable MU, which denotes the marginal utility of any goods, and in the denominator the variable P denoting their price. And then MU1 will refer to P1 as MU2 - to P2 and so an nite number of times.

Naturally, the consumer's equilibrium conditions must have some prerequisites:

1. It is necessary that the goods or goods that a person acquires correspond to the capabilities of his budget, i. Were on the so-called budget line ;
2. So that in the market of goods and services, material and other benefits, the consumer had the opportunity to find, select the most optimal combination of the sought.

The term consumer equilibrium is associated with another concept - the indifference curve. It is understood as those goods, services, etc., which are either not accessible to a particular consumer, or do not meet its individual requirements, and therefore cause only partial interest, or do not cause any at all. Or it can show what a person would like to get if his budget met these needs. And if we translate these relations into a function graph, then both lines, i.e. The indifference curve and the budget, will give an accurate picture of how the buyer can get the most benefit and satisfaction from the purchased goods, etc. In the limited framework of its budget. Specifically, this is understood as follows: there is a person's income, it is planned to budget - whether family, for a month or a week - according to the situation. In the budget, things are bought, even two or two things, different. Economists-planners working in the system of market relations, it is important to calculate the situation, under what scenario the consumer will receive the maximum utility from these acquired benefits with his budget.

Why is this necessary? First, in order to properly classify classes and ranks of customers according to their needs and material capabilities. Secondly, to fill the market with goods in demand at the moment and to forecast possible future needs. And, finally, to lead a correct pricing policy, in which both the products will be sold out, and the manufacturing companies, intermediaries, etc. Will not remain in the lap