What is difference curve in economics?
What is difference curve in economics? In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer. How do you derive a demand curve from an indifference map? At the utility-maximizing solution, the consumer's marginal rate of substitution (the absolute value of the slope of the indifference curve) is equal to the price ratio of the two goods. We can derive a demand curve...