## Indifference curves, Managerial Economics

Assignment Help:

Indifference curves

In order to explain indifference curves, we will again make the simplifying assumption that the consumer buys two goods, x and y.

The table below gives a number of combinations of x and y which the consumer considers to give the same satisfaction as for example, combination c of bx and 4y is thought to give the same satisfaction as D where 7x and 2y are consumed.  The consumer is thus said to be indifferent as to which combination they have hence the name given to this type of analysis.

Table :  An indifference schedule

 Combination Units of x Units of y A        B        C        D 1        4        6        7 12        7        4        2

Figure 2.3 gives a graphical representation of the figures in Table

Such a graph is called an indifference curve:

An indifference curve shows the lines of combinations of the amounts of two goods say x and y such that the individual is indifferent between all combinations on that curve.

At each point on the indifference curve the consumer believes that the same amount of utility is received.

#### Marginal revenue, Marginal Revenue Marginal revenue is the additional r...

Marginal Revenue Marginal revenue is the additional revenue an organization receives resulting from the sale of one more item of output. Marginal revenue is calculated by takin

#### Explain the shut down point, Q. Explain the Shut down point? ShutdownP...

Q. Explain the Shut down point? ShutdownPoint: With MR = MC, firm attains equilibrium at point E where it produces OM amount of the output. To produce this output, firm incur

#### Interest and the keynesian liquidity preference theory, Interest and the Ke...

Interest and the Keynesian Liquidity Preference Theory Interest is a factor income in that it is considered to be payment to or return on capital in the sense that it is payme

#### Production planning in demand forecast period, Q. Production Planning in de...

Q. Production Planning in demand forecast period ? Long term production planning can assist the management in organising long term finances on practical terms and conditions. S

#### Fall in supply - effect on equilibrium price, Fall in Supply When...

Fall in Supply When the supply falls, the supply curve shifts to the left to position S 1 S 1 .  At the initial equilibrium price P 1 , quantity supplied falls from q 1

#### Health care economics, prepare a break-even analysis to determine volume re...

prepare a break-even analysis to determine volume required to cover costs with and without a specified profit target and price.

#### Factors influencing exchange rates, Factors influencing Exchange Rates ...

Factors influencing Exchange Rates i.  Inflation:   Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil

#### #titwillliomson model, explian williomson model of managerial discretion

explian williomson model of managerial discretion

#### Elasticity of Demand, Calculate point elasticity of demand for demand funct...

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2.