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Consumer Equilibrium
A state in which a consumer has allocated their income in a way that maximizes their utility, given prices and their budget constraint.
Substitution Effect
The change in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with less expensive ones.
Income Effect
The change in an individual's or economy's consumption patterns due to a change in real income, which can result from wage changes, inflation, or taxation adjustments.
Consumer Equilibrium
The point at which the quantity of a product demanded by consumers equals the quantity supplied, leading to a state where there is no incentive for prices to change.
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