Incase of a right angled indifference curve the goods are:a)Perfect co...
The marginal rate of substitution between perfect substitutes is likewise constant. An example of a utility function that is associated with indifference curves like these would be . If two goods are perfect complements then the indifference curves will be L-shaped.
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Incase of a right angled indifference curve the goods are:a)Perfect co...
Explanation:
An indifference curve is a graph that shows all the possible combinations of goods that provide equal satisfaction to the consumer. The consumer is indifferent between any two combinations on the same indifference curve.
A right-angled indifference curve is one that has a vertical and a horizontal line. This means that the consumer is willing to substitute one good for the other only in fixed proportions. The two goods are perfect complements.
Perfect Complements:
Perfect complements are goods that are consumed together in a fixed proportion. They are also called "joint products," "complementary goods," or "complements in consumption." Examples include left and right shoes, car tires, and computer hardware and software.
Characteristics of Perfect Complements:
1. Fixed Proportions: The two goods are consumed in fixed proportions. If the consumer wants to increase the consumption of one good, they have to increase the consumption of the other good in the same proportion.
2. Right-Angled Indifference Curve: The indifference curve is a right-angled line because the consumer is indifferent between any two combinations of the goods that are in fixed proportions.
3. Marginal Rate of Substitution (MRS) is Zero: The MRS is the rate at which the consumer is willing to substitute one good for the other while maintaining the same level of satisfaction. In the case of perfect complements, the MRS is zero because the consumer is not willing to substitute one good for the other.
Conclusion:
In the case of a right-angled indifference curve, the two goods are perfect complements because the consumer is willing to consume them only in fixed proportions. The indifference curve is a right-angled line, and the MRS is zero.
Incase of a right angled indifference curve the goods are:a)Perfect co...
Yes it is correct as mrs dimnishes the l shaped curve belongs complementary gooda which r offcourse perfect .
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