The two conditions are :
(i) The ratio of marginal utility to price is same in case of all the goods consumed. Suppose the consumer consumes only two goods x and y then
MUx/ Px=MUy/ Py
(ii) Marginal utility has a tendency to fall as more and more units are consumed.
Or simply,
A consumer'* equilibrium depends upon three factors :
(i) MU of a product,
(ii) MU of a rupee (money), and
(iii) Price of the product.
