PROPERTIES OF INDIFFERENCE CURVE

Introduction:
The indifference curve is a tool to measure utility by ordinal approach. The concept
of indifference curve was first presented by J. R. Hicks in 1939 in his book Capital
and Value.
Definition:
• Dogulas Greenwald:
“Indifference Curve is a graphic curve which
represents the various combinations of two
goods that will yield the same total
satisfaction”.
• Professor Leftwich:
“A single indifference curve shows the different
combinations of X and Y that yield equal
satisfaction to the consumer”.
• In other words:
“Indifference Curve is a curve which shows
same level of total satisfaction on all its

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possible points”.
An indifference curve represents such combinations of two commodities which
provide equal satisfaction to the consumer. It is drawn such that the units of one
commodity are taken on X-axis and the units of the other commodity are taken on
Y-axis. An IC looks like as given below:

Properties of Indifference Curves:

The indifference curves have some specific properties which are give below:
1. ICs are downward sloping
2. ICs are convex to origin
3. ICs never intersect each other
4. Higher IC shows higher level of satisfaction
5. There are infinite ICs in a plane
Now we explain and prove these properties one by one:

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1. ICs are downward sloping:
For a curve to be an IC, all the points on it must show equal satisfaction. We
know to remain at the same level of satisfaction if we increase the amount of
one good must have to decrease the amount of another good. This gives us a
downward sloping curve. Because all the points on an IC have equal

Y1

X1 X2
satisfaction, therefore,

an IC will always be downward sloping as shown above:

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Here, as we move from point ‘a’ to point ‘b’ the amount of good X is increasing
but that of good Y is decreasing. So, both ‘a’ and ‘b’ may show same
satisfaction.
Following diagrams further illustrate that a curve other than downward sloping
cannot be an IC:
a) Y2
Upward Sloping:

Y2

Y1

X1 X2

In this diagram point ‘b’ shows greater satisfaction than ‘a’ because it has more
quantity of both X and Y. So, an upward sloping curve cannot be IC.
b) Parallel to X-axis:

Y1

X1 X2

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In this diagram ‘b’ has more satisfaction than ‘a’ because ‘b’ has more amount
of X than ‘a’. Therefore, a parallel to X-axis line cannot be IC.
c) Parallel to Y-axis:

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In this diagram ‘b’ has more satisfaction than ‘a’ because ‘b’ has more amount
of Y than ‘a’. Therefore, a parallel to Y-axis line cannot be an IC.
2. ICs are convex to origin:
A downward sloping curve can be convex or concave to origin, or it may be a
straight line. An indifference curve is always convex to origin, i.e. it always bend
towards the origin from center. We can prove this as follows:
The amount of good Y which the consumer leaves to get one more unit of good
X is called Marginal Rate of Substitution (MRS). For an indifference curve this
MRS is always diminishing. A convex curve shows diminishing MRS as shown in
the following diagram. Here we have shown MRS by arrows.

This diagram shows diminishing MRS as shown by the arrows.

On the other hand a concave and straight line does not satisfy the diminishing
MRS condition.

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 a) Concave Curve:

Here we can see that MRS is increasing instead of diminishing, as shown by the
arrows. So, a concave curve cannot be an IC.
b) Straight Line:

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Here we can see that MRS is constant instead of diminishing. So, a straight line
can also not be an IC.
3. ICs never intersect each other:
To prove that ICs never intersect each other, we can examine two intersecting
curves and can prove that intersecting curves cannot be ICs.

Let us consider the points a, b and c. Suppose the curves I and II are ICs. If
curve I is an IC then points ‘a’ and ‘c’ must have equal satisfaction. Moreover, if
curve II is an IC, the points ‘b’ and ‘c’ must also show equal satisfaction.
Because a=c and b=c, in terms of satisfaction, then it implies that a=b. But
from diagram we can see that ‘a’ has more amounts of both goods than ‘b’, so
‘a’ has more satisfaction than ‘b’. Therefore, our assumption is not true. Hence
it is prove that I and II, which are intersecting curves, cannot be ICs.

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 4. Higher IC shows higher satisfaction:
This property can be proved by considering the following diagram:

Point ‘b’ on IC II shows greater quantities of X and Y as compared to point ‘a’ on

IC I. This means that point ‘b’ has more satisfaction. If it is true for point ‘b’ it
will be true for all points on IC II. Thus, IC II which is higher, show greater
satisfaction than IC I, which is lower.
5. There are infinite ICs in a plane:
A point representing any combination of goods will always be on some
indifference curve. This means that every point in x-y plane represents some

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combination of goods and lies on some IC. Because there are infinite points in a
plane, it implies that there are infinite ICs in a plane.
Conclusion:
From the above discussion we conclude that there is infinite number of downward
sloping, non-intersecting, convex to origin ICs in a plane.