diffrence between APC and MPC ?
There are two related measures of propensity to consume- Average Propensity to Consume and the Marginal Propensity to Consume.
Average Propensity to Consume (APC) expresses the propensity to consume in aggregate terms. It shows the ratio of consumption expenditure to the level of income. Algebraically,
On the other hand, Marginal Propensity to Consume (MPC) expresses the propensity to consume in proportionate terms. It refers to the ratio of change in the consumption expenditure and change in the disposable income. Algebraically,