Concept of Indifference Curve:
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The curve representing all combinations of goods which give same satisfaction to a consumer is called Indifference Curve. It means the consumer is indifferent between them, that is, it will no matter to him which one he gets. In other words, all combinations of the goods lying on a consumer’s indifference curve are equally desirable or equally preferred by him.


Now, convert indifference schedule into indifference curve by plotting the various combinations on a graph. Generally, added quantity is placed on horizontal axis and reduced quantity on vertical axis. Therefore, the quantity of good X is measured on X-axis and good Y is measured on Y-axis. The curve IC1 (Fig.3). As in indifference schedule-I, all combinations lying on IC1 will give same level of satisfaction. The smoothness and continuity of an indifference curve means that goods in question are assumed to be perfectly divisible. If the indifference schedule-II is also converted into indifference curve (IC2), this will lie above the lie above IC1. IC2 gives higher satisfaction than IC1. It means that the indifference curve lying above and to the right of an indifference curve will indicate higher level of satisfaction.