|
Information > Financial Terms > This page Indifference Curve An
indifference curve represents graphically alternative combinations of
two products toward which a consumer is indifferent.
In the diagram below, the individual would be indifferent between
the combination of goods X and Y denoted by point A and that denoted by
point B. The individual would
prefer any combination of these goods that is to the right of the indifference
curve, and would not choose to be to the left of the indifference curve. An
indifference curve is a theoretical construct used in economics to illustrate
certain theoretical propositions, such as the law of demand. Back to Information |