Saturday 8 January 2011

Indifference curve

A curve used in economics which shows how consumers would react to different combinations of products. On the graph, a quantity of one product appears on the x axis and a quantity of another product appears on the y axis. Consumers would be equally satisfied at any point along a given curve, as each point brings the same level of utility to that consumer. The slope of the curve is referred to as the marginal rate of substitution.

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