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TWO IMPORTANT PROPERTIES OF INDIFFERENCE CURVE

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  Learning Contents:                                                              ·          Indifference curve does not cross or intersect each other. ·          When two commodities are consumed, IC neither touches X-axis nor Y-axis. Why Indifference curve do not cross or intersect each other? The indifference curves cannot intersect with each other, because if it does so, then the combinations of two commodities lying on two different curves will yield the same level of satisfaction which is not correct or will violate the transitivity and monotonicity assumption of consumer preferences.                               Fig.1: Intersecting Indifference Curves ·       Figure 1 shows two indifference curves namely IC 1 and IC 2 intersects each other at point A. ·    Considering IC 1 that has two combinations   namely A and B which offers a consumer an equal satisfaction as they lie on same indifference curve IC 1 Hence, A=B. ·    Considering IC 2 that has two combinat