Explain the features of indifference curve

Asked by admin @ 10/08/2021 in Economy viewed by 292 People

Explain any two features of indifference curve with the help of diagrams

Answered by admin @ 10/08/2021

INDIFFERENCE CURVES ARE CONVEX TO THE ORIGIN. THE CONVEXITY RULE IS DUE TO THE DIMINISHING MARGINAL RATE OF SUBSTITUTION (MRS).
INDIFFERENCE CURVES SLOPES DOWNWARDS FROM LEFT TO RIGHT OR THEY HAVE NEGATIVE SLOPE. THAT IS IF THE VALUE OF ONE GOOD IN COMBINATION IS INCREASED THE VALUE IF OTHER GOOD IS HIS IS ESSENTIAL TO MAINTAIN THE SAME LEVEL OF SATISFACTION.
TWO INDIFFERENCE CURVES CANNOT INTERSECT EACH OTHER. IF TWO INDIFFERENCE CURVES INTERSECT EACH OTHER IT WOULD SHOW DIFFERENT LEVELS OF SATISFACTION WHICH IS ABSURD & IMPROBABLE.
A HIGHER INDIFFERENCE CURVES REPRESENTES A HIGHER LEVEL OF SATISFACTION THAN THE LOWER IC. SPECIFICALLY , IC TO THE RIGHT SHOWS MORE SATISFSCTION THAN TO LEFT & HENCE THE CONSUMER TRIES TO REACH THE HIGHEST IC TO MAXIMIZE HIS SATISFACTION & ATTAIN EQUILIBRIUM .

CHECK THE ATTACHMENT FOR DIAGRAM

What could explain the curve in this population growth graph

Asked by admin @ 26/10/2021 in Biology viewed by 293 persons

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One feature of pure monopoly is that the demand curve

Asked by admin @ 28/10/2021 in Business viewed by 290 persons

One defining characteristic of pure monopoly is that: the monopolist is a price taker. the monopolist uses advertising. the monopolist produces a product with no close substitutes. there is relatively …