Indifference Curve

Posted in Finance, Accounting and Economics Terms, Total Reads: 1204
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Definition: Indifference Curve

It is believed in economics that an individual selects among combination of quantities of goods depending on the utility provided by them as per the individual’s preferences.

An indifference curve is a curve indicating that the individual will be indifferent to the combination of goods or bundles that lie on the indifference curve, since the indifference curve denoted the goods having the same utility value.

For Example, All points on one indifference curve give the person the exact same amount of utility.

For instance, if you give Mohan a choice between points A and B on this indifference curve, he is indifferent to the combination of the products.

One shirt and two pair of Shoes makes him just as content as two T-shirts and one pair of Shoes.

Indifference Curve


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