2. Add a Slide Title - 1
An Indifference Curve is a curve which represents different combinations of two goods which yield equal
satisfaction to the consumer and he is indifferent in the matter of choice among them.
It is the locus of points each representing combination of two goods yielding the same utility or level of
satisfaction and the consumer is indifferent between any two combinations of goods when it comes to making a
choice between them.
Such a situation arises because a consumer consumes a large number of goods and services and often he finds
that one commodity serves as a substitute for another. This gives him an opportunity to substitute one commodity
for another . In that case he is able to make various combinations of two substitute goods which give him the same
level of satisfaction. When such combinations are plotted graphically , it results into a curve and that curve is
indifference curve
According to Koutosyiannis “An indifference curve is the locus of points of particular combinations of goods
which yield the same utility to the consumer , so that he is indifferent as to the particular combination he
consumes”.
Indifference curve is also known as Iso-utility curve and Equal utility curve.
3. Indifference Schedule: An indifference schedule is a table which represents various combinations of two goods which
yield equal satisfaction to the consumer and that the consumer is indifferent in choosing among those combinations.
The following is an imaginary indifference schedule representing the various combinations of two goods i.e. Tea and
Biscuits.
In this table, five different combinations A,B,C,D and E are portrayed. All these combinations give equal satisfaction to
the consumer. The consumer is indifferent whether he buys the first combination i.e.1cup of Tea + 12 Biscuits or last
combination E i.e. 5 cups of Tea + 2 Biscuits or any other combination because each combination yields equal satisfaction
(utility U) to him.
4. 0
2
4
6
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12
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0 1 2 3 4 5 6
BISCUIT
TEA
Indifference Curve
Indifference Curve: The graphic representation of indifference schedule or picturization of indifference
schedule is indifference curve.
5. Indifference Map: A set of or family of indifference curves is an indifference map.
In this map , a lower indifference curve represents lower level of satisfaction and a higher indifference curve
represents level of satisfaction.
IC 1
IC 2
IC 3
IC 4
IC 5
XGOOD
Y GOOD
6. Indifference curve slopes downwards from left to right i.e. have Negative slope.
Indifference curves are generally convex to the origin.
Indifference curves do not intersect.
The indifference curves cannot even touch or meet or be tangent.
Higher indifference curve represents higher level of satisfaction.
Indifference curves need not to be parallel to each other.
Indifference curves do not touch either X-axis or Y-axis.
Some bumps or wobbles of concavity could occur over some range of indifference curves.
Indifference curves become complex in case of more than two goods.
PROPERTIES OF INDIFFERENCE CURVE
PERVAIZ AHMAD MIR
ASSISTANT PROFESSOR
GDC KULGAM