“Indifferent Curve Theory is an advanced theory of consumer behaviour. Evaluate”
Index Number :
Introduction Page 03
What is an Indifference Curve Theory? Page 04
Properties of Indifferent Curve Page 05-09
Indifference curves and Budget Lines Page 10
What is Marginal Utility Theory Page 10 -11
Market price and Diminishing Marginal Utility Page 11
Conclusion Page 12
In society, the demand and supply of various commodities, the trading of goods and other items are mainly based on what society requires.
It will be outlined as to the manner by which the most suitable item can be selected and which item would have the most utility based on the consumer behaviour.
Two theories will be used in order to show the differences in capturing the pattern of consumer behaviours that would be the Marginal Utility Theory and the Indifference curve.
Their properties and how they are generally viewed would be explained along with diagrams and such for further illustration.
This is to show if the Indifference curve theory could be considered and advanced theory in order to help measure and evaluate consumer behaviours as compared to the other theories that are introduced.
What is an Indifference Curve Theory?
In Microeconomics, the Indifference Curve Analysis is an important analytical tool in the study of consumer behaviour. An indifference curve is a graph showing different bundles of goods between which a consumer is indifferent.
One can equivalently refer to each point on the curve as a locus of combinations of goods which derive the same level of satisfaction for the consumer, so that the consumer is indifferent to any of the combination he consumes.
If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either...