What is Indifference Curve?
An indifference curve is a graphical representation of a combined products that gives similar kind of satisfaction to a consumer thereby making them indifferent.Every point on the indifference curve shows that an individual or a consumer is indifferent between the two products as it gives him the same kind of utility.
Indifference Curve Analysis
The indifference curve analysis work on a simple graph having two-dimensional. Each individual axis indicates a single type of economic goods. If the graph is on the curve or line, then it means that the consumer has no preference for any goods, because all the good has the same level of satisfaction or utility to the consumer. For instance, a child might be indifferent while having a toy, two comic book, four toy trucks and a single comic book.
The Indifference Map refers to a set of Indifference Curves that reflects an understanding and gives an entire view of a consumer’s choices. The below diagram shows an indifference map with three indifference curves.
Here, we understand that all three products resting in the indifferent curve give him the same satisfaction. However, his preference for those combined products can be arranged in the order of preference.
Following are the features of indifference curve
|(a) INDIFFERENCE CURVE ALWAYS SLOPES DOWNWARDS FROM LEFT TO RIGHT||
(say apples), quantity of another good (say oranges) must fall so that the total satisfaction (utility) remains same.
|(a) INDIFFERENCE CURVE IS ALWAYS CONVEX TO THE ORIGIN||
(c) HIGHER INDIFFERENCE CURVE REPRESENTS
HIGHER LEVEL OF SATISFACTION