WHAT IS THE CONCEPT OF INDIFFERENCE CURVES
An indifference curve is the one which shows the possible combination of two
commodities, each yielding the same satisfaction or utility to the consumer.
All the combinations of two commodities represented on the indifference curve give the consumer the same unit of utility, such that he is “indifferent” as which particular set of combination he prefers, combination X will not give him more or less satisfaction than combi
nation Y, as long as both combination X and Y are on the same
indifference curve. In other words, it does not matter to the consumer which combination he
gets. If he gets combination X instead of combination Y, he will not feel any better off.
Two more points must be noted about
- They indicate higher and higher levels of satisfaction as one moves rightwards, i.e. an indifference curve on the right hand side fig. 27.7 represents a higher level of satisfaction or utility than the one on the left of it. That is, indifference curve YY corresponds to higher level satisfaction than indifference curve XX.
(2) The indifference curves cannot intersect, i.e. the curves can never cross each other since two indifference curves represent two different levels of satisfaction, which can never be equal.