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Indifference Curve – Meaning, History, Uses & Analysis


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Indifference Curve – Meaning, History, Uses & Analysis


Its a curve, with respect to two commodities. It is a graph showing those combinations of the two commodities. That leaves the consumer equally well off or equally satisfied. Hence indifferent to having any combination on the curve.

These curves are heuristic devices that are used in contemporary microeconomics. To demonstrate the consumer preference and the limitations of a budget. Economists have adopted the principles of indifference curves. In the study of welfare economics.

The Understanding and Indifference Curve

Standard indifference curve analysis operates on a simple two-dimensional graph. Each fixed reference line represents one type of economic good. Along the curve or the line, the consumer has no preference for either combination of goods.

Because both goods provide the same level of utility to the consumer. For example, a young boy might be indifferent between his own two comic books and one toy truck. Four toy trucks and one comic book.


It operates under many guesses, for example, typically each such curve is having an outline to the origin. No two indifference curves ever intersect.

Consumers are always assumed to be more satisfied. When achieving bundles of goods on indifference curves that are far from the origin.

As income increases, an individual will typically shift their consumption level. Because they can afford more commodities. With the result that they will end up on an indifference curve. That is far from the origin and hence better off.

Many core principles of microeconomics appear in its analysis. Including individual choice, marginal utility theory, income, substitution effects, and the subjective theory of value.

Indifference curve analysis gives special importance to marginal rates of substitution that is MRS and opportunity costs. All other economic variables and possible complications are treated as stable. Ignored unless placed on the indifference graph.

Most of the economic textbooks are built upon these curves. Introduce the most favorable choice of goods for any consumer based on that consumer’s income.

Classic analysis suggests that the optimal consumption bundle. Takes place at the point where a consumer’s indifference curve is touching with their budget limitations.

The slope of this curve is known as the MRS. The MRS is the rate at which the consumer is willing to give up one good for another. If the consumer values apples. For example, the consumer will be slower to give them up for oranges. The slope will reflect this rate of substitution.

Criticisms and Complications of the Indifference Curve

Indifference curves, like many aspects of contemporary economics, have been criticized for oversimplifying or making unrealistic assumptions about human behavior. One noteworthy criticism is that indifference is conceptually incompatible with economic activity. Every action necessarily gives a practical exhibition preference, but not indifference. Otherwise, no action would take place.

Other critics note that it is theoretically possible to have concave indifference curves. Even the circular curves are either convex or concave to the origin at various points. Consumer preferences might also change between two different points. In a time of rendering the specific indifference curves that are practically useless.


The theory of Indifference Curves was developed by Francis Ysidro Edgeworth. He was explained in his 1881 book. The mathematics needed for their drawing. Later on, Vilfredo Pareto was the first author to actually draw these curves. In his 1906 book.

The theory can be taken from William Stanley Jevons’ ordinal utility theory. Which put forward that individuals can always rank any consumption bundles by the order of preference.

The use of the Indifference Curve on the subject Biology

It is used in the subject of biology. The indifference curve is a model for how animals ‘decide’ whether to perform a particular behavior. It is based on changes in two variables that can increase in intensity. One along the x-axis and the other along the y-axis.

For example, the x-axis may measure the quantity of food is available. But the y-axis measures the risk involved in obtaining it. The indifference curve is drawn to estimate the animal’s behavior at various levels of risk and food availability.

So, this is the important information on the topic of the Indifference Curve. Here I have mentioned the meaning of the Indifference Curve, its understanding, Analysis, criticism, complications, and History of the Indifference Curve and also in the subject of Biology.

This is a frequently used analysis in the graph with the proper measurements. I think this is very important in business and financial as well as in the subject of higher studies.

If any Queries or Questions is persisting then, please comment on the viewpoints.

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