indifferenssikäyrällä

Indifferenssikyrvaella, which translates to indifference curve in English, is a fundamental concept in microeconomics used to represent consumer preferences. It graphically illustrates combinations of two goods that provide a consumer with the same level of utility or satisfaction. Any point on a single indifference curve is considered equally desirable to the consumer.

Indifference curves are typically downward sloping and convex to the origin. The downward slope signifies that to maintain the same level of satisfaction, if a consumer consumes more of one good, they must consume less of the other. The convexity arises from the principle of diminishing marginal rate of substitution, meaning as a consumer has more of one good, they are willing to give up progressively less of another good to obtain an additional unit of the first.

A map of indifference curves, showing multiple curves, depicts different levels of utility. Curves further from the origin represent higher levels of satisfaction, as they indicate the consumption of more of both goods, assuming they are desirable. Consumers are assumed to prefer bundles of goods represented by higher indifference curves. The intersection of indifference curves is not possible, as it would imply contradictory preferences. Indifference curves are a key tool for analyzing consumer choice, budget constraints, and the derivation of demand curves.