Consumer Equilibrium:

This refers to a situation in which consumers cannot increase the total utility they obtain from a given budget (i.e. the amount of money they have to spend at any given time) by shifting expenditure from one good to another. For a consumer that has a given amount of money to spend on two goods, the consumer equilibrium  condition is said to prevail if the marginal utility per Naira worth of the two goods are the same. Assuming a consumer has an amount of money income to spend on meat pie and soft drink, the equilibrium conditions in equation form is

Where

MU_m = marginal utility of meat pie MU_s = marginal utility of soft drink P_m = unit price of meat pie

P_s = unit price of soft drink

Y = consumer's money income

Equation is called the consumer's budget constraint. Equations also referred to as the necessary and sufficient conditions for consumer equilibrium, respectively. The consumer equilibrium condition is alternatively referred to as utility maximization condition.