Indifference curve is a geometric device that has been used to replace the neo-classical cardinal utility concept. Professor Hicks presented its comprehensive version in his book value of capital. The indifference curve analysis measures utility ordinarily. Here our aim is to identify the indifference curve.
Definition: Indifference curve is the locus of some points, which refers same utility in every combination of two products. Indifference curve is derived from indifference schedule which is a list of combination of two commodities, the list being so arranged a consumer is indifferent to the combination i.e. utility is same in every combination.
Assumption: The assumptions of the ordinal theory are the following:
1) The consumer acts rationally so as to maximize satisfaction.
2) There are two goods x and y.
3) The consumer posses complete information about the price of goods in the market.
4) The price of two goods is given.
5) The consumer’s tastes, habits and income remain the same throughout the analysis.
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