assumption of IC analysis of consumer's equilibrium?
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1. Consumer must be rational.
2. Consumer always choose monotonic preferences.
3. Consumer want to derive higher satisfaction as much as he can from his fixed income.
4. Income remains fixed.
2. Consumer always choose monotonic preferences.
3. Consumer want to derive higher satisfaction as much as he can from his fixed income.
4. Income remains fixed.
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Answer:
The indifference curve analysis of consumer's equilibrium is based on the following assumptions: (1) The consumer's indifference map for the two goods X and Y is based on his scale of preferences for them which does not change at all in this analysis. (2) His money income is given and constant.
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