What is an indifferent curve?

The indifference curve is a somewhat technical economic concept that measures the reaction of consumers to the volume of goods or services. As with many economic concepts, the indifference curve is shown on the right angle graph, with the amount of one product listed on the vertical axis and the amount of another product on the horizontal axis. The curve starts at the top left of the graph and slopes down and right. The purpose is to measure how much of one product the consumer gives preference to another. The tool plays a key role in measuring the values ​​of products for consumer. Consumers may increase or reduce their usefulness by buying more or less, depending on their indifference to the product bundle. However, consumers can experience the law of revenue revenue, which means that consumers experience the usefulness of a certain consumption of goods and services.

Economic charts may include several packages of product afterpower of indifferent curves for each volume. This allows individuals to analyze multiple products at the same time. The indifference curve is curved, which means that consumers will usually have a negative substitution effect, because consumers may be dissatisfied with the fact that they have to buy one good place of another. Revenue also plays a role in substitute goods, because consumers may not be able to buy certain goods based on the price of charged companies. This creates a negative slope for an indifferent curve.

Two goods can be perfect substitutes, which means that the indifference curve will have a constant curve, because consumers will be more willing to accept substitutes at different intervals on the curve. In this scenario, consumers can buy cheaper good, because you do not see it as less usefulness than a product with a higher price. Therefore, the point on the indifference curve will go up or down behind the curve, depending on the consumer preference for different product packages.

goods or services moohou be perfect accessories, which means that consumers buy certain products in relation to each other. For example, an increase in hot dog sales will often lead to higher buns. In this scenario, the L -shaped curve would be indifferent to each product. In addition, factors that affect the consumption of one item may not affect the consumption of free goods.