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precisely how do the mpc and the apc differ? how does the mpc differ from the mps? why must the sum of the mpc and the mps equal 1?

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The mpc is the marginal propensity to consume and the apc is the average propensity to consume. The mpc measures how much extra consumption results from a change in income, while the apc measures the overall consumption out of total income.

What is mpc?
The marginal propensity to consume (MPC) is a measure of induced consumption in economics, which is the idea that an increase in disposable income leads to an increase throughout personal consumer spending (consumption) (income after taxes and transfers). Propensity to consume is the percentage of disposable income that people spend on consumption. MPC is the percentage of additional income that a person spends. For instance, if a household receives an additional dollar in disposable income as well as the marginal propensity to consume seems to be 0.65, it will spend 65 cents of that dollar and save 35 cents. Of course, the family cannot spend more than additional $1. (without borrowing). When compared to rich people, the MPC is higher for poorer people.

To learn more about mpc
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