With the formula of consumption function determine MPC
The formula for the consumption function is:
C = a + MPC * Y
Where:
C = consumption
a = autonomous consumption
MPC = marginal propensity to consume
Y = income
To determine MPC, we can rewrite the formula as:
MPC = (C - a) / Y
Where:
MPC = marginal propensity to consume
C = consumption
a = autonomous consumption
Y = income
By calculating the change in consumption (C) minus autonomous consumption (a) divided by the change in income (Y), we can determine the marginal propensity to consume (MPC).