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

Note: The given answer is as per NTA. However, there appears to be a mistake in the question/answer as explained below:

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.

This exact statement is not directly given in the options.

Further, the NCERT does not explain the concept of market rate of exchange. However, Marginal Rate of Exchange (MRE) is another term used for the price ratio in some reference books.

So going by reference books , Option 1 is effectively saying: MRS = Price Ratio → Which is correct.

Option 2: says Marginal Rate of Exchange = Price Ratio. This only states a definition, not the equilibrium condition. It is like saying “Price ratio equals price ratio.” It does not involve MRS, so it does not show consumer equilibrium.

Hence, conceptually, Option (1) better represents the consumer equilibrium condition.