The indifference curve


An indifference curve is a locus of combination of points that shows all the possible combinations of two goods which give him the same level of satisfaction. All the combinations between which a person is indifferent( that’s why its called indifference curves).

Also, we can say that when the problem of choice arises, the consumer ranks all such combinations of the same 2 goods at the same level.

An Indifference Schedule

Combinations

Units of A

Units of B


All these combinations yield equal satisfaction to the consumer.

A

12

2

B

6

4

C

4

6

D

3

8

Drawing the above table on a graph would give the following curve, Which we call indifference curve.

· Kindly remember when we talk about indifference curve, we are concerned with utility(satisfaction) only, not price.

· In Indifference curve IC1, all the points A,B, C and D provides the consumer same level of satisfaction. So, he can choose either of 4 .He is indifferent to any point on the curve IC1. All points provide him the same level of satisfaction

**An important point to remember is that the use of an indifference curve does not try to put a physical measure onto how much utility a person receives.





1 comment:

lee woo said...

A different world cannot be built by indifferent people. See the link below for more info.


#indifferent
www.ufgop.org