How is consumer surplus curve different from indifference curve?
Answers
What is an Indifference Curve?
It is a curve that represents all the combinations of goods that give the same satisfaction to the consumer. Since all the combinations give the same amount of satisfaction, the consumer prefers them equally. Hence the name Indifference Curve.
Here is an example to understand the indifference curve better. Peter has 1 unit of food and 12 units of clothing. Now, we ask Peter how many units of clothing is he willing to give up in exchange for an additional unit of food so that his level of satisfaction remains unchanged.
what is a consumer surplus
The consumers’ surplus is a concept introduced by Marshall, who maintained that it can be measured in monetary units, and is equal to the difference between the amount of money that a consumer actually pays to buy a certain quantity of a commodity x, and the amount that he would be willing to pay for this quantity rather than do without it.