illustrate the consumers equillibrium using indifference curves analysis
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generally, consumers equilibrium can be analysed in two ways 1. cardinal utility 2. ordinal utility
the ordinal utility analysis of consumer behaviour is known as 'indifference curve analysis' it makes use of indifference curve to study the behaviour of consumer
Explanation:
Assumptions of Analysis
1.the analysis assumes that, the indifference map which shows the scale of preference of consumer
2. income of the consumer is provided and are constant
3. prices of two commodities are provided and are constant
4. competition in goods market is perfect
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