A consumer consumes only two goods X and Y and is in equilibrium. Explain the reaction of the consumer through utility analysis.

Let the Marginal utility for good X = MU_x

Marginal utility for good Y = MU_y

Price of good X = P_x

Price of good Y = P_y

According to Utility analysis, consumer is in equilibrium when

Where, MU_m = Marginal Utility of money

Now, P_x falls,

And when P_y falls,