A consumer is said to be in equilibrium, if

A consumer is in equilibrium when she maximises satisfaction from the combinations of goods she can afford and thus has no incentive to change her consumption. Standard definitions describe consumer equilibrium as achieving the maximum possible satisfaction from purchases given the consumer’s income and market prices. That choice is limited by the budget constraint — only bundles costing no more than the consumer’s income are feasible [1]. In indifference‑curve/budget‑line analysis, the consumer’s optimum is the most preferred affordable bundle, typically where an indifference curve is tangent to the budget line [1]. Option (1) best matches this concept: fulfilling needs (maximising satisfaction) within a given income constraint.

Sources

1. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 2.2.1 Budget Set and Budget Line > p. 15
2. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > 2.6.3 Elasticity and Expenditure > p. 33