An indifference curve attaches points on a graph demonstrating different measures of two goods, points among which a customer is indifferent. That is, the customer has no preference for one mixture or package of goods over a different mixture on the similar curve. One can also mention to every point on the indifference curve as interpreting the same level of utility (satisfaction) for the customer. In additional words, an indifference curve is the locus of numerous points display different mixtures of two goods providing identical utility to the customer. Utility is then a device to signify preferences rather than something from which preferences come. The main use of indifference curves is in the representation of possibly noticeable demand configurations for separate customers over product bundles.
There are infinitely many indifference curves: one passes through each mixture. A gathering of selected indifference curves, exemplified graphically, is mentioned to as an indifference map.
Indifference curves are continuously negatively sloped. This is built on the assumption that a customer is always better off consuming more of a good, so as amount spent of one good increase, total consummation would rise if not offset by a decrease in the amount spent of another good.
Why the indifference curve is downward sloping?
The indifference curves must slope down ward from left to right. This means that an indifference curve is negatively sloped. It slopes down because as the customer raises the consumption of X product, he has to give up certain components of Y product in order to uphold the similar level of satisfaction.
Can indifference curve upward sloping?
A set of indifference curves can be upward sloping if we interrupt assumption number three; more is desired to less. When a set of indifference curves is upward sloping, it means one of the properties is a “bad” in that the customer favors less of the good before more of the good.
July 29, 2017