{"id":3622,"date":"2020-02-25T06:30:13","date_gmt":"2020-02-25T06:30:13","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3622"},"modified":"2020-02-25T06:30:13","modified_gmt":"2020-02-25T06:30:13","slug":"consumer-equilibrium-using-indifference-curve","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/","title":{"rendered":"CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_72 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/#CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\" title=\"CONSUMER EQUILIBRIUM USING\nINDIFFERENCE CURVE ANALYSIS\">CONSUMER EQUILIBRIUM USING\nINDIFFERENCE CURVE ANALYSIS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/#ASSUMPTIONS_OF_CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\" title=\"ASSUMPTIONS OF CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS\">ASSUMPTIONS OF CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/#CONDITIONS_OF_CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\" title=\"CONDITIONS OF CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS\">CONDITIONS OF CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/#SUPERIORITY_OF_INDIFFERENCE_CURVE_OVER_CARDINAL_UTILITY_ANALYSIS\" title=\"SUPERIORITY OF INDIFFERENCE CURVE OVER\nCARDINAL UTILITY ANALYSIS\">SUPERIORITY OF INDIFFERENCE CURVE OVER\nCARDINAL UTILITY ANALYSIS<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"consumer-equilibrium-using-indifference-curve-analysis\"><span class=\"ez-toc-section\" id=\"CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\"><\/span><strong>CONSUMER EQUILIBRIUM USING\nINDIFFERENCE CURVE ANALYSIS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Consumer equilibrium using <a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"indifference curve analysis (opens in a new tab)\">indifference curve analysis<\/a> is an <strong>Ordinal Approach to Consumer Equilibrium. <\/strong>An indifference curve is a locus of all combinations of two goods which yield the same level of satisfaction (utility) to the consumers. Since any combination of the two goods on an indifference curve gives equal level of satisfaction, the consumer is indifferent to any combination he consumes. Thus, an indifference curve is also known as \u2018equal satisfaction curve\u2019 or \u2018iso-utility curve\u2019. It&nbsp;asserts that the consumer is said to have attained equilibrium when he maximizes his total utility (satisfaction) for the given level of his income and the existing prices of goods and services.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"assumptions-of-consumer-equilibrium-using-indifference-curve-analysis\"><span class=\"ez-toc-section\" id=\"ASSUMPTIONS_OF_CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\"><\/span><strong>ASSUMPTIONS OF CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the indifference curve\napproach, the equilibrium position of the consumer is achieved under the\nfollowing assumptions: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The consumer\nhas a given indifference curve map exhibiting his scale of preferences for\nvarious combinations of two goods, X and Y. <\/li><li>The consumer\nhas a fixed amount of money to be spent on two goods. He has to spend whole of\nhis given money on the two goods. <\/li><li>Prices of\ngoods are given and constant for him. <\/li><li>Goods are\nhomogeneous and divisible. <\/li><li>Tastes and\npreferences of the consumer remain constant. 6) The consumer seeks maximum\nsatisfaction.<\/li><\/ul>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"conditions-of-consumer-equilibrium-using-indifference-curve-analysis\"><span class=\"ez-toc-section\" id=\"CONDITIONS_OF_CONSUMER_EQUILIBRIUM_USING_INDIFFERENCE_CURVE_ANALYSIS\"><\/span><strong>CONDITIONS OF CONSUMER EQUILIBRIUM<\/strong> <strong>USING INDIFFERENCE CURVE ANALYSIS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The ordinal\napproach defines two conditions of consumer equilibrium:&nbsp;<\/p>\n\n\n\n<p><strong>Necessary or\nFirst Order Condition<\/strong>&nbsp;<strong><\/strong><\/p>\n\n\n\n<p><strong>Supplementary or\nSecond Order Condition<\/strong>.<\/p>\n\n\n\n<p><strong>Necessary Condition or First\nOrder Condition:&nbsp;<\/strong>Under\nthe first order condition, the consumer reaches his equilibrium in the same\nmanner as he does under the cardinal approach of the two-commodity model. It is\nexpressed as:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA1-1.jpg\" alt=\"ordinal approach-1a\" class=\"wp-image-3625\"\/><figcaption><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/figcaption><\/figure>\n\n\n\n<p>By implication,<a href=\"https:\/\/businessjargons.com\/wp-content\/uploads\/2016\/05\/ordinal-approach-1a.jpg\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA2-1.jpg\" alt=\"ordinal approach-1b\" class=\"wp-image-3626\"\/><figcaption><strong><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/strong><\/figcaption><\/figure>\n\n\n\n<p>Thus, the necessary condition of\nthe cardinal approach to consumer equilibrium can be written as:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA3-1.jpg\" alt=\"ordinal approach-1c\" class=\"wp-image-3627\"\/><figcaption><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/businessjargons.com\/wp-content\/uploads\/2016\/05\/ordinal-approach-1c-1.jpg\" target=\"_blank\" rel=\"noopener\"><\/a><strong><\/strong><\/p>\n\n\n\n<p><strong>Supplementary or Second Order\nCondition:&nbsp;<\/strong>The first order condition is\nnecessary but not sufficient. Thus, the second order or supplementary condition\nrequires that the necessary condition must be accomplished at the highest\npossible indifference curve on the indifference map.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"450\" height=\"446\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA4.jpg\" alt=\"Ordinal approach to consumer equilibrium\" class=\"wp-image-3628\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA4.jpg 450w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA4-300x297.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA4-150x150.jpg 150w\" sizes=\"auto, (max-width: 450px) 100vw, 450px\" \/><figcaption><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/businessjargons.com\/wp-content\/uploads\/2016\/05\/Ordinal-approacgh-to-conumker-equilibrium.jpg\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n\n\n\n<p>In the figure above, there are\nthree indifference curves, Viz. IC<sub>1<\/sub>, IC<sub>2<\/sub>, and IC<sub>3<\/sub>&nbsp;presenting\na hypothetical indifference map of the consumer. AB is the hypothetical budget\nline. At point \u2018E\u2019, the indifference curve IC<sub>2&nbsp;<\/sub>and Budget line\nAB intersect and hence, therefore, the slope of IC<sub>2<\/sub>&nbsp;= AB. At\nthis point, both the necessary condition and the supplementary condition get\nfulfilled, and hence, the consumer attains equilibrium at point \u2018E\u2019.<\/p>\n\n\n\n<p>We know that between any two\npoints on the indifference curve:<br \/>\n\u0394Y. MU<sub>y<\/sub><strong>&nbsp;=&nbsp;<\/strong>\u0394X. MU<sub>x<\/sub><\/p>\n\n\n\n<p>Thus, the slope of the\nindifference curve can be written as:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"230\" height=\"96\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA5.jpg\" alt=\"ordinal utility approach-1\" class=\"wp-image-3629\"\/><figcaption><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/figcaption><\/figure>\n\n\n\n<p><a href=\"https:\/\/businessjargons.com\/wp-content\/uploads\/2016\/05\/ordinal-utility-approach-1-1.jpg\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n\n\n\n<p>The slope of budget line is given\nas:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/OA6-1.jpg\" alt=\"ordinal approach-2\" class=\"wp-image-3630\"\/><\/figure>\n\n\n\n<p><a href=\"https:\/\/businessjargons.com\/wp-content\/uploads\/2016\/05\/ordinal-approach-2.jpg\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n\n\n\n<p>In the figure above, at point\n\u2018E\u2019, MRS&nbsp;<sub>x, y<\/sub>&nbsp;= P<sub>x&nbsp;<\/sub>\/P<sub>y<\/sub>&nbsp;and\nhence the consumer is said to have attained equilibrium at this point. The IC<sub>2<\/sub>&nbsp;is\ntangent with the budget line AB, which shows that the consumer has reached to\nthe highest possible indifference curve for a given level of his income and the\nmarket price of goods and services. Thus, at point \u2018E\u2019 consumer consumes\nquantity OQ<sub>x<\/sub>&nbsp;of X and OQ<sub>y<\/sub>&nbsp;of Y, which yields\nhim the maximum utility or satisfaction.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"superiority-of-indifference-curve-over-cardinal-utility-analysis\"><span class=\"ez-toc-section\" id=\"SUPERIORITY_OF_INDIFFERENCE_CURVE_OVER_CARDINAL_UTILITY_ANALYSIS\"><\/span><strong>SUPERIORITY OF INDIFFERENCE CURVE OVER\nCARDINAL UTILITY ANALYSIS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The indifference curve technique, as developed by Professor Allen and Hicks, is regarded as an improvement over the Marshallian utility analysis because it is based on fewer and more realistic as\u00adsumptions:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"720\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/SUPERIORITY-OF-INDIFFERENCE-CURVE-OVER-CARDINAL-UTILITY.jpg\" alt=\"\" class=\"wp-image-3640\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/SUPERIORITY-OF-INDIFFERENCE-CURVE-OVER-CARDINAL-UTILITY.jpg 960w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/SUPERIORITY-OF-INDIFFERENCE-CURVE-OVER-CARDINAL-UTILITY-300x225.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/02\/SUPERIORITY-OF-INDIFFERENCE-CURVE-OVER-CARDINAL-UTILITY-768x576.jpg 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><figcaption><strong>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/strong><\/figcaption><\/figure>\n\n\n\n<p><strong>(1) It Dispenses with Cardinal\nMeasurement of Utility:<\/strong><strong><\/strong><\/p>\n\n\n\n<p>The entire utility analysis assumes that\nutility is a cardinally measurable quantity which can be assigned weights\ncalled \u2018utils\u2019. If the utility of an apple is 10 utils, of a banana it is 20\nutils and of a cherry 40 utils, then the utility of a banana is twice that of\nan apple and of a cherry four times that of apple and twice that of banana.<\/p>\n\n\n\n<p>This is not\nmeasurability but transitivity. In fact, the utility which a commodity\npossesses for a consumer is something subjective and psychological and therefore\ncannot be measured quantitatively. The indiffer\u00adence approach is superior to\nthe utility analysis because it measures utility ordinally. The consumer\narranges the various combinations of goods in a skate of preference marked as\nfirst, second, third etc. He can tell whether he prefers the first to the\nsecond or the second to the first or he is indifferent between them. But he\ncannot tell by how much he prefers one to the other. The ordinal method and the\nassumption of transitivity make this technique more realistic.<\/p>\n\n\n\n<p><strong>(2) It studies Combinations of two Goods instead of one Good:<\/strong><\/p>\n\n\n\n<p>The utility approach is a single-commodity\nanalysis in which the utility of one commodity is regarded independent of the\nother. Marshall avoided the discussion of substitutes and complementary goods\nby grouping them together as one commodity.<\/p>\n\n\n\n<p>This assumption is far from reality because a\nconsumer buys not one but combinations of goods at a time. The indifference\ncurve technique is a two commodity model which discusses consumer behaviour in\nthe case of substitutes, complementaries and unrelated goods. It is thus\nsuperior to the utility analysis.<\/p>\n\n\n\n<p><strong>(3) It provides a Better Classification of Goods into Substitutes and Complements:<\/strong><\/p>\n\n\n\n<p>The earlier economists explained substitutes\nand complements in terms of cross elasticity of demand. Hicks considers this\ninadequate and explains them after making compensating variation in income. He\nthus overcomes the ambiguity to be found in the traditional classification of\nsubstitutes and complements.<\/p>\n\n\n\n<p><strong>(4) It explains the Law of Diminishing Marginal Utility without the Unrealistic Assump\u00adtions of the Utility Analysis:<\/strong><\/p>\n\n\n\n<p>The utility analysis postulates the law of\ndiminishing marginal utility which is applicable to all types of goods,\nincluding money. Since this law is based on the cardinal measurement, it\npossesses all the defects inherent in the later. In the preference theory, this\nlaw has been replaced by the principle of diminishing marginal rate of\nsubstitution.<\/p>\n\n\n\n<p>The latter, according to Prof. Hicks, \u201cis not\nmere translation but it is a positive change\u201d. It is scientific and is, at the\nsame time, free from the psychological quantitative measurement of the utility\nanalysis. The application of this principle in the fields of consumption,\nproduction and distribution has made economics more realistic.<\/p>\n\n\n\n<p><strong>(5) It is Free from the Assumption of Constant Marginal Utility of Money:<\/strong><\/p>\n\n\n\n<p>Marshall justified it on the plea that an\nindividual consumer spends only a small part of his whole expenditure on any\none thing at a time. This assumption makes the utility theory unrealistic in\nmore than one way. It is applicable to a single-commodity model. It fails to\nuse money as the measuring rod of an individual\u2019s satisfaction derived from the\nconsumption of various goods. On the other hand, the indifference curve\ntechnique analyses the income effect when the income of the consumer changes.<\/p>\n\n\n\n<p><strong>(6) This Analysis explains the Dual Effect of the Price Effect:<\/strong><\/p>\n\n\n\n<p>One of the main defects in the Marshallian\nutility analysis is that it fails to analyze the income and substitution\neffects of a price change. In the indifference curve technique when the price\nof a good falls, the real income of the consumer increases. This is the income\neffect. Secondly, with the fall in price, the good becomes cheaper.<\/p>\n\n\n\n<p>The consumer substitutes it for some other\ngood. This is the substitution effect. The indifference curve technique is\ndefinitely superior to the utility analysis because it discusses the income\neffect when the consumer\u2019s income changes; the price effect when the price of a\nparticular good changes and its dual effect in the form of the income and\nsubstitution effect. It also studies the cross effect when with change in the\nconsumer\u2019s income, the price of the other good also changes.<\/p>\n\n\n\n<p><strong>(7) It explains the Proportionality Rule in a Better Way:<\/strong><\/p>\n\n\n\n<p>The indifference curve technique explains\nconsumer\u2019s equilibrium in a similar but better way than the Marshallian\nproportionality rule. The consumer is in equilibrium at a point where his\nbudget line is tangent to the indifference curve. At this point the slope of\nthe indifference curve equals the budget line, so that the<\/p>\n\n\n\n<p><strong>(8) It rehabilitates the Concept of Consumer\u2019s Surplus:<\/strong><\/p>\n\n\n\n<p>Hicks have explained the concept of\nconsumer\u2019s surplus by dispensing with the unrealistic assumption of the\nconstancy of the marginal utility of money. He regards consumer\u2019s surplus \u201cas a\nmeans of expressing, in terms of money income, the gain which accrues to the\nconsumer as a result of a fall in price.\u2019\u2019 Thus the doctrine of consumer\u2019s\nsurplus is no longer a \u2018mathematical puzzle\u2019 and has been freed from the\nintrospective cardinalism of the utility theory.<\/p>\n\n\n\n<p><strong>(9) It explains the Law of Demand more Realistically:<\/strong><\/p>\n\n\n\n<p>The indifference curve technique explains the\nMarshallian law of demand in a more realistic manner in more than one way. It\nis untainted by the psychological assumptions of the utility analysis. It\nexplains the effect of the fall in the price of an inferior good on consumer\u2019s\ndemand. Giffen goods which remained a paradox for Marshall throughout have been\nably explained with the help of this technique.<\/p>\n\n\n\n<p><strong>Whereas in the Marshallian law\nof demand the demand for a commodity varies inversely with its price and the\ndemand curve slopes negatively down\u00adward to the right, the indifference\nanalysis explains two more situations:<\/strong><\/p>\n\n\n\n<p>(i) With the fall in the price of a\ncommodity, its demand remains unchanged. It happens in the case of those\ninferior goods whose income effect exactly equals substitution effect.<\/p>\n\n\n\n<p>(ii) When the price of the commodity falls, its demand also falls. This is the case of Giffen goods whose income effect outweighs the substitution effect and the demand curve slopes upward having a positive slope. Marshall failed to explain these cases. This makes the indifference curve technique definitely superior to the Marshallian introspective cardinalism.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/demand\/\">Theory of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-demand\/\">Law of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/demand-function\/\">Demand Function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/exceptions-of-law-of-demand\/\">Exceptions of law of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\">Elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/change-in-demand\/\">Change in demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/price-elasticity-of-demand\/\">Price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-law-of-demand-and-elasticity-of-demand\/\">Law of demand Vs Elasticity of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/factors-affecting-price-elasticity-of-demand\/\">Factors affecting price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/production-function\/\">Production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-short-run-long-run-production-function\/\">Short run vs long run production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\">Law of variable proportions<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/types-of-demand\/\">Types of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/managerial-economics\/\">Managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/characteristics-of-managerial-economics\/\">Characteristics of managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-managerial-economics\/\">Scope of managerial economics<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/utility-analysis\/\">Utility analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-marginal-utility\/\">Law of diminishing marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-equi-marginal-utility\/\">Law of equi marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium\/\">Consumers Equilibrium<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\">Indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve-analysis\/\">Consumer equilibrium using indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\">Relationship between TP, AP and MP<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-increasing-returns\/\">Law of increasing returns<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-returns\/\">Law of diminishing returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-constant-returns\/\">Law of constant returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\">Returns to Scale<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\">Economies and diseconomies of scale<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/concept-of-costs\/\">Concept of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-ac-and-mc\/\">Relationship between AC and MC<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/traditional-theory-of-cost\/\">Traditional theory of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/modern-theory-of-cost\/\">Modern theory of costs<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explicit-vs-implicit-costs\/\">Explicit vs Implicit costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue\/\">Revenue<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-competition\/\">Perfect competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\">Monopoly<\/a>&nbsp;<\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\">Price discrimination<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-and-monopoly\/\">Difference between perfect competition and monopoly<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\">Perfect Vs Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-and-monopolistic-competition\/\">Monopoly and monopolistic competition<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/product-differentiation-strategy\/\">Product differentiation strategy<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\">Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/national-income-in-india\/\">National Income in India<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/measurement-of-national-income\/\">Measurement of national income in India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/consumption-function\/\">Consumption function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/keynesian-psychological-law-of-consumption\/\">Keynes Psychological law of consumption<\/a><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"266\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg\" alt=\"CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS\" class=\"wp-image-787\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-300x78.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-768x199.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1536x398.jpg 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS Consumer equilibrium using indifference curve analysis is an Ordinal Approach to Consumer Equilibrium. An indifference curve is a locus of all combinations of two goods which yield the same level of satisfaction (utility) to the consumers. Since any combination of the two goods on an indifference curve gives equal&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;CONSUMER EQUILIBRIUM USING INDIFFERENCE CURVE ANALYSIS&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3633,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[113,92],"tags":[],"class_list":["post-3622","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-managerial-economics","category-micro-economics"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3622"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3622\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3633"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}