A rational consumer reaches to equilibrium when:

Marginal rate of Exchange = Price Ratio

The correct answer is Option (2) → Marginal rate of Exchange = Price Ratio

A rational consumer reaches equilibrium when they maximize their satisfaction given their income and the prices of goods. This happens when:

Marginal Rate of Substitution (MRS) = Price Ratio (Px/Py)

• MRS is the rate at which the consumer is willing to substitute one good for another while maintaining the same level of utility.

• Price Ratio is the rate at which the market allows the substitution between two goods based on their prices.

At equilibrium, the consumer’s willingness to trade between goods matches the market’s trade-off. Therefore, the correct answer is Marginal rate of substitution = Price Ratio.