Consumer Equilibrium using Cardinal Approach

Consumer equilibrium is the situation where a consumer gets maximum utility/satisfaction at prevailing prices in the market.

Following is the consumer equilibrium using cardinal utility approach which means consumer can measure his/her satisfaction in numbers. Cardinal utility approach divides consumer equilibrium in 2 cases:

  • One commodity case
  • Two commodity case

One Commodity Case(Consumer Equilibrium)

Assumptions

  • The utility is cardinal i.e. it can be measured numerically
  • Price of good is constant
  • The income of the consumer is constant
  • The consumer will buy one good only
Quantity Price (Rs.) Marginal Utility (MU) Total Utility (TU)
1 5 10 10
2 5 8 18
3 5 7 13
4 5 5 17
5 5 3 20
  • A rational consumer makes his/her choice of buying goods which give him/her maximum utility by comparing Marginal Utility (MU) and Price (P) of the commodity/good. From the above table, we can see that at 4th unit MU = P which is the point where the consumer is at equilibrium.
  • 1 unit above 4th unit i.e. 3rd unit, here MU > P which means the consumer can buy more unit of a good which will give him additional utility.
  • 1 unit below 4th unit i.e. 5th unit, here MU < P which discourages the consumer to buy more unit of the good as it utility derived at the 5th unit is less than the price. Therefore, Consumer equilibrium is at 4th unit where MU = P = 5 and TU = 17.

For all this Law of Diminishing Marginal Opportunity (LDMU) must operate which says when more and more units of a good are consumed the utility derived from every additional unit goes on decreasing.

Two Commodity Case

Assumptions

  • Utility is cardinal i.e. it can be measured numerically
  • Price of both the goods is constant
  • Income of consumer is constant
  • Consumer spend entire income on both the goods

For consumer to be in equilibrium in two commodity case MUx/Px = MUy/Py i.e. Law of Equi-Marginal Utility should be achieved which means that utility derived from spending last rupee on Good X is equal to the utility derived from spending last rupee on Good Y.

If MUx/Px > MUy/Py , which means by spending last rupee on Good X gives more utility than spending last rupee on Good Y. This induces the consumer to buy more of Good X than Good Y due to which utility derived from Good X goes on decreasing and utility derived from Good Y increases (because of law of marginal diminishing utility ). Therefore, MUx/Px decreases while MUy/Py increases as Px and Py are constant. This change will continue till the time MUx/Px = MUy/Py and Consumer Equilibrium is achieved.

If MUx/Px < MUy/Py , which means by spending last rupee on Good Y gives more utility than spending last rupee on Good X. This induces the consumer to buy more of Good Y than Good X due to which utility derived from Good Y goes on decreasing and utility derived from Good X increases (because of law of marginal diminishing utility ). Therefore, MUy/Py decreases while   increases as Px and Py. This change will continue till the time MUx/Px = MUy/Py and Consumer Equilibrium is achieved.

For this Law of diminishing Marginal Utility must operate. Example – If suppose LDMU (Law of Diminishing Marginal Utility) does not operate then, when Mux/Px > MUy/Py and consumer consumes more of Good X than Good Y which will always give him more utility From Good X than Good Y and consumer will end up spending his/her entire income on Good X only. And same goes when MUx/Px < MUy/Py, here consumer will  end up spending his/her entire income on Good Y as it gives more utility than Good X. Therefore to attain Consumer Equilibrium Law of Diminishing Marginal Utility must operate.                                       

Abbreviations Used:

  • MUx – Marginal Utility from Good X
  • MUy – Marginal Utility from Good Y
  • Px – Price of Good X
  • Py – Price of Good Y

Hudson Lane ‘s Top Cafes and Restraurant

Hudson Lane is the most loved spot by almost every Delhiite who is foodoholic as it provides a wide range of cafes and restaurants which serve you amazingly tempting and delicious food. Hudson Lane is the place where you can enjoy any kind of food be it Italian or Chinese without costing you much. Thousands of people, mainly college students, visit Hudson Lane daily as it is budget friendly with impeccable quality and taste.

So here are the few restaurants & cafes which are top in line :

Chalte Firte Momos

Chalte Firte Momos is the restaurant which does not stop its hand in making your food delicious and mouth-watering. This is the cheapest and loveliest place I have ever visited as their staff is too friendly with the customers. Also they do not compromise with the food quality and in their services.

  • Ambience: Nice ambience ,low lighting
  • Price: 300/- for two (approx.)
  • Quality: 9/10
  • Must Try: Peri Peri Pasta, Tandoori Platter, Peri Peri Pizza

Spezia Bistro

Spezia Bistro is one of the best food providers in the Hudson Lane as food has impeccable quality and their service is way too fast. Because of high food quality everyone wants to visit this place due to which it gets crowded you may have to wait for like 15 mins but they will make sure after 15 mins your hunger and taste buds are fully satisfied.

  •  Ambience: Good ambience ,low lighting
  • Price: 800/- for two (approx.)
  • Quality: 9.5/10
  • Must Try: Drums Of Heaven, Chilli Potato, Mix Sauce Pasta

Indus Flavour

Indus flavour, the family restaurant,  in Hudson Lane gives you wide choices of North Indian and Chinese dishes to choose from. They believe in serving high quality food at minimal prices and also have a different menu with reduced prices for college going students, if you show them your id. And to them every customer is their family member so they serve you a complimentary welcome drink, an Aam panna shot which has a great combination of Raw Mango and Spices.

  • Ambience: Average Ambience, Lighting is good
  • Price: 700/- for two (approx.)
  • Quality: 8.5/10
  • Must Try: Malai Tandoori Momos, Dahi Ke Sholey, Paneer Trio

Mama’s Boui

Mama’s Boui is one of the best cafe in Hudson Lane for birthday parties (above 18), friends get together etc., moreover  for casual gathering . With great quality food, they have a tremendous music system, so you can show your moves over there. The staff is well organised with super fast service. Their Hookahs are lit combined with both mocktails and coktails.

  • Ambience: Ambience is nice, Dim Lighting
  • Price: 1000/- for two (approx.)
  • Quality: 9/10
  • Must Try: Malai Tandoori Momos, Dahi Ke Sholey, Paneer Trio

Cafeteria & Co.

Cafeteria & co is one of the best cafes in Hudson Lane with casual dining and with wide range of delicious choices with the perfect seating. Continental and Mexican is their cup of tea and you can taste that in their food. The friendly and cordial staff make sure that everything moves smoothly and is worth your time. Food and Mocktails  served here are insta-worthy as their presentation is just amazing.

  • Ambience: Classy ambience ,Amazing Lighting
  • Price: 1000/- for two (approx.)
  • Quality: 9.5/10
  • Must Try: Fajita Fries, Marilyn Monroe burger, Peri Peri Pasta

Cantino

Cantino Cafe is of the one most peace cafe you’ll ever visit with mouth watering food , live music and perfect dining. They just don’t serve food; they make love to their dishes as their food has set a bench mark for all the cafes and restaurants in Hudson Lane. It also provides you with a bar, so you can enjoy some cocktails with your tastilious food.

  •  Ambience: Cozy ambience ,Amazing Lighting
  • Price: 900/- for two (approx.)
  • Quality: 9/10
  • Must Try: All Pastas and Pizza, Peri Peri Chicken, Chilli Chicken

Sambookas

Sambookas is a casual dining restaurant with super amazing food. The quality and quantity of dishes served here is just perfect. The staff too is very friendly and serve your choices in minimum time possible. They don’t serve alcohol products so you can visit this place with your family too.

  • Ambience: Friendly Ambience
  • Price: 900/- for two (approx.)
  • Quality: 9/10
  • Must Try: Churros, Pizza, Ferrero Rocher Shake

Hudson café

Hudson cafe the most amazing and popular cafe in Hudson Lane. Many youtubers have also visited this place for their video shoots. As this place has a great combination of environment and food which you like every time you visit this place.The staff is also cordial and chefs are super talented as this talent can be tastes in their dishes.

  • Ambience: Amazing Ambience
  • Price: 950/- for two (approx.)
  • Quality: 9/10
  • Must Try: Pizza, Berry Delight, Peri Peri Chicken Wings
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