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Indifference curve cannot intersect each other because _________.
  • a)
    two difference satisfaction lines cannot have a common point
  • b)
    technically impossible to draw such lines
  • c)
    of operation of marginal utility theory
  • d)
    of operation of increasing cost theory
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Indifference curve cannot intersect each other because _________.a)two...
If two indifference curves intersects each other than there would be more than one equilibrium or more than one point where the customer can get maximum satisfaction. This violates the laws of indifference curve. 
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Indifference curve cannot intersect each other because _________.a)two...
Indifference curve cannot intersect each other because:

a) Two different satisfaction lines cannot have a common point:
- Indifference curves represent different levels of satisfaction or utility that a consumer derives from different combinations of goods or services.
- Each indifference curve represents a specific level of utility, and higher indifference curves represent higher levels of utility.
- If two indifference curves were to intersect, it would mean that the same combination of goods or services would provide two different levels of utility, which is not possible.
- According to the theory of consumer behavior, a consumer's preferences are transitive, meaning that if a consumer prefers bundle A to bundle B and bundle B to bundle C, then the consumer must prefer bundle A to bundle C.
- If indifference curves were to intersect, it would violate the transitivity of consumer preferences because the consumer would prefer a bundle on one indifference curve to a bundle on another indifference curve that intersects it.
- Therefore, two indifference curves cannot intersect each other.

b) Technically impossible to draw such lines:
- Indifference curves are typically drawn on a two-dimensional graph with the quantity of one good on the x-axis and the quantity of another good on the y-axis.
- If two indifference curves were to intersect, it would mean that there are two different levels of utility for the same combination of goods, which is not possible to represent on a two-dimensional graph.
- Drawing intersecting indifference curves would result in a violation of the basic principles of graph representation.

c) Operation of marginal utility theory:
- Indifference curves are based on the concept of marginal utility, which states that the additional satisfaction derived from consuming an additional unit of a good decreases as the quantity of that good consumed increases.
- As a result, indifference curves are downward sloping because as the quantity of one good increases, the quantity of the other good must decrease to maintain the same level of satisfaction.
- If two indifference curves were to intersect, it would imply that the marginal utility of both goods is the same at the point of intersection, which contradicts the principle of diminishing marginal utility.

d) Operation of increasing cost theory:
- Increasing cost theory states that as more of one good is produced, the opportunity cost of producing additional units of that good increases.
- This theory is often used to explain the shape of a production possibilities curve, not indifference curves.
- Indifference curves are based on consumer preferences and utility, not production costs.

In conclusion, indifference curves cannot intersect each other because it would imply different levels of utility for the same combination of goods, contradicting the principles of consumer preferences and utility theory.
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Indifference curve cannot intersect each other because _________.a)two difference satisfaction lines cannot have a common pointb)technically impossible to draw such linesc)of operation of marginal utility theoryd)of operation of increasing cost theoryCorrect answer is option 'A'. Can you explain this answer?
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