Indifference Curves

An indifference curve shows combinations of goods and services between which a consumer is indifferent

• In other words, each combination on an indifference curve gives the consumer the same total satisfaction
• An indifference curve is normally drawn as convex to the origin
• This reflects the assumption of the law of diminishing marginal satisfaction / marginal utility
• I.e. as we consume extra units of something, the extra utility falls, total utility rises at a diminishing rate
• Combinations of products on an indifference curve further from the origin are assumed to give greater total utility