Indifference curve theory assumes that preferences will be consistent, given the same information and constraints. In other words, if the decision-making context for an individual remains constant on both Monday and Tuesday, then a consumer will have the same order of preference on Tuesday as on Monday.

What is the indifference curve theory?

An indifference curve shows a combination of two goods that give a consumer equal satisfaction and utility thereby making the consumer indifferent. Along the curve, the consumer has an equal preference for the combinations of goods shown—i.e. is indifferent about any combination of goods on the curve.

Who gave indifference curve theory?

Developed by the Irish-born British economist Francis Y. Edgeworth, it is widely used as an analytical tool in the study of consumer behaviour, particularly as related to consumer demand.