This question was 110t attempted by most candidates. The few who attempted it scored low marks. This was due to the fact that most of the candidates did not mention the effect ora price rise or fallon equilibrium and how equilibrium could be attained afterwards.

Candidates were expected to state for example.that if' the price or X PX falls. the equilibrium condition would no longer be satisfied. Marginal utility of X. MUx would he greater than the Px i.e. MU > Px.

To establish an equilibrium. MUx must fall to the same level as Px. This happens when the consumer buys more of X. On the other hand. if the Px rises. again the equilibruim condition would not be satisfied. MUx < Px. To attain an equilibrium. the consumer would buy less of X to raise the MUx to the same level as Px.