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Indifference curve analysis
0 Developed - Edge worth
0 It was later preferred by J.R Hicks & R.J.D. Allen
0 indifference c...
ASSUMPTION OF
INDIFFERENCE CURVE
0 A consumer is assumed to buy any two goods in combinations.

0 A consumer can rank the ...
INDIFFERENCE CURVE
Good Y

0

An indifference curve may be defined as the
locus of various combination of two goods which
...
INDIFFERENT SCHEDULE
For eg:
0 The following table shows the indifference schedule of
combination of biscuits and cups of ...
Graphical representation of indifference schedule…

Y

60

A

BISCUITS

50
40

B

30

C
D

20

E

F

10

00

0

2

4
CUPS ...
INDIFFERENCE MAP
A collection of indifference
curve is known as indifference map.
0 A higher indifference curve indicates ...
Thanks….
Indifference curve Managerial Economics
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Indifference curve Managerial Economics

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Indifference curve Managerial Economics

  1. 1. Indifference curve analysis 0 Developed - Edge worth 0 It was later preferred by J.R Hicks & R.J.D. Allen 0 indifference curve approach is also known as ordinal utility approach.. 0 consumer express their utility in terms of preference not in term of quantity.
  2. 2. ASSUMPTION OF INDIFFERENCE CURVE 0 A consumer is assumed to buy any two goods in combinations. 0 A consumer can rank the alternative combinations and compare their level of satisfaction, and he prefers a combination providing a higher level of satisfaction. 0 Consumer is rational and his choices are transitive. 0 The consumer behavior is assumed to be constant, throughout the analysis.
  3. 3. INDIFFERENCE CURVE Good Y 0 An indifference curve may be defined as the locus of various combination of two goods which yield the same total satisfaction to the consumer Good X
  4. 4. INDIFFERENT SCHEDULE For eg: 0 The following table shows the indifference schedule of combination of biscuits and cups of tea for a consumer. combination A B C D E F Cups of Tea 1 2 3 4 5 6 + + + + + + + Biscuits 50 38 26 21 17 15
  5. 5. Graphical representation of indifference schedule… Y 60 A BISCUITS 50 40 B 30 C D 20 E F 10 00 0 2 4 CUPS OF TEA 6 8 X
  6. 6. INDIFFERENCE MAP A collection of indifference curve is known as indifference map. 0 A higher indifference curve indicates a higher level of satisfaction and vise versa. Good y Y 0 0 Ic3 Ic2 Ic1 Good x X
  7. 7. Thanks….

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