How it differs from CARDINAL UTILITY ????

Asked by Eng.surinder.singh | 30th Jul, 2017, 09:52: AM

Expert Answer:

Consumer equilibrium is the point where the consumer is getting the maximum amount of satisfaction given the income of the consumer and the prices of the goods.

Cardinal approach- Satisfaction can be measured in absolute terms. It is measured in utils. Higher satisfaction signified by higher utils.

Ordinal approach- Satisfaction cannot be measured in absolute numbers but can be ranked as per the preferences. It is measured in terms of ranks. Higher satisfaction signified by higher rank.

Answered by Tharageswari S | 31st Jul, 2017, 08:48: AM