Why indifference curve slope downward?
As we know indifference curve represents combination of two goods which gives same level of satisfaction. In order to maintain same level of satisfaction consumer sacrifice some units of one commodity to consume more units of other good due to Law of DMU. It means there is an inverse relationship b/w quantity of both the goods so IC is always downward sloping from left to right
Why indifference curve slope downward?
Introduction:
Indifference curves are graphical representations that show different combinations of two goods that give a person the same level of satisfaction or utility. These curves slope downwards from left to right, which is a fundamental characteristic of indifference curves.
Explanation:
The slope of an indifference curve is the rate at which a person is willing to give up one good to obtain more of the other good while remaining at the same level of satisfaction. The slope is negative because as a person gets more of one good, they are willing to give up less of the other good to maintain the same level of satisfaction.
Diminishing Marginal Utility:
The downward slope of the indifference curve can be explained by the concept of diminishing marginal utility. This concept states that the more of a good a person consumes, the less additional satisfaction they get from consuming one more unit of that good.
Substitution Effect:
Another reason for the downward slope of indifference curves is the substitution effect. As the price of one good increases, people tend to substitute it with a cheaper alternative to maintain their level of satisfaction. This substitution effect leads to a negative slope of the indifference curve.
Income Effect:
The income effect is also responsible for the downward slope of indifference curves. As a person's income increases, they tend to consume more of both goods, leading to a steeper slope of the indifference curve.
Conclusion:
In conclusion, indifference curves slope downwards due to the concepts of diminishing marginal utility, substitution effect, and income effect. These concepts explain why people are willing to give up one good for another while remaining at the same level of satisfaction.
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