Properties of Indifference Curve
1) Convex to the Origin : It is convex to the origin because of law of diminishing MRS.MRS decline because of law of diminishing marginal utility.If the consumer consume more and more of X, his marginal utility from X keeps on declining and he is willing to give up less and less of Y for X.Therefore it is convex to origin.
2) Slope Downwards : It means that as a consumer consume more of one good,he/she must consume less of other good.It happen because if the consumer decide to have more units of one good, he/she will have to reduce the number of units of another good.So that total utility remain constant.
3) Indifference Curves can neither touch nor Intersect each other: No two Indifference Curves can intersect or cut each other.As two IC cannot represent the same level of satisfaction, they cannot intersect each other.It means,only one indifference curve will pass through a given point on indifference map.
In this the satisfaction from point C and point B on IC1 will be same.Similarly point C and A on IC2 also give the same level of satisfaction.It means, points A and B should also give same level of satisfaction.However this is not possible as A and B lie on different IC i.e., IC1 and IC2 and represent different level of satisfaction.
4)Higher indifference curve represent higher level of satisfaction:
A higher indifference curves to the right of another represents a higher level of satisfaction and preferable combination of the two goods. consider the indifference curves IC1 and IC2 and combination S and (R&Q) respectively on them.The IC2 will give high satisfaction on any point i.e., R and Q will provide same level of satisfaction.
5)An indifference curve cannot touch either axis: If it touches X-axis the consumer will be having OM quantity of good X and none of Y. Similarly, if an indifference curve IC2 touch the У-axis at L the consumer will have only OL of Y good and no amount of X. Such curves are in contradiction to the assumption that the consumer buys two goods in combinations.
In this the satisfaction from point C and point B on IC1 will be same.Similarly point C and A on IC2 also give the same level of satisfaction.It means, points A and B should also give same level of satisfaction.However this is not possible as A and B lie on different IC i.e., IC1 and IC2 and represent different level of satisfaction.
4)Higher indifference curve represent higher level of satisfaction:
A higher indifference curves to the right of another represents a higher level of satisfaction and preferable combination of the two goods. consider the indifference curves IC1 and IC2 and combination S and (R&Q) respectively on them.The IC2 will give high satisfaction on any point i.e., R and Q will provide same level of satisfaction.
5)An indifference curve cannot touch either axis: If it touches X-axis the consumer will be having OM quantity of good X and none of Y. Similarly, if an indifference curve IC2 touch the У-axis at L the consumer will have only OL of Y good and no amount of X. Such curves are in contradiction to the assumption that the consumer buys two goods in combinations.
So these are the basic properties of an Indifference Curve.
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