An Indifference Curve is the locus of all those points representing various combinations of two goods giving the same satisfaction to the Consumer.
According A.L.Meyers, “An Indifference curve is a schedule of various combinations of goods which will be equally satisfactory to the consumer concerned.”
Indifference Schedule: An Indifference Schedule is a table representing the various combinations of goods which give equal satisfaction to the consumer. The following table shows the indifference schedule of combinations of Biscuits and cups of Tea for a consumer
| Combinations |
Cups of Tea |
Biscuits |
| A |
1 |
12 |
| B |
2 |
8 |
| C |
3 |
5 |
| D |
4 |
3 |
| E |
5 |
2 |
In the above table it is assumed that consumer is purchasing combination of cups of tea and biscuits. He is indifferent between the five combinations given above. Combination A shows that the consumer has one cup of tea and 50 biscuits, while combination B shows that the consumer gets two cups of tea and 8 biscuits. The consumer is indifferent between these combinations since they give him the same level of satisfaction. Similar is the case with the other combinations i.e., C, D and E.
Indifference curve : It shows the different commodities in which consumers get equal satisfaction.
In the above diagram, IC is an Indifference curve. The different points on it show the various combinations of Tea and Biscuits. The consumer likes all of them equally. He is indifferent about his choice. By joining these points we obtain the IC. Although in the successive combinations the amount of biscuits goes on diminishing as we move from the left side of the IC to the right, the increase in the quantity of cups of tea is sufficient to compensate him for the loss of biscuits so that the consumer is indifferent about them.
Indifference curve shows the different combinations of two commodities in which consumers get equal satisfaction, indifference Map: It refers to a set of indifference curves for two commodities showing different levels of satisfaction. The higher indifference curves show higher level of satisfaction and lower IC. represents lower satisfaction. A rational consumer always chooses more of that product that offers him a higher satisfaction and represent in higher IC. It is also called ‘Monotonic preferences’.
In the above diagram IC4 gives higher level of satisfaction and the IC1 gives lowest level of satisfaction.
