Theory of Consumers Behavior
Theory of Consumers Behavior
Indifference curve: Meaning, Assumptions and Properties
- An indifference curve is a locus representing different combi...}
Theory of Consumers Behavior
Cardinal vs Ordinal utility and Marginal Rate of Substitution
- Cardinal utility approach has two principles. They are Law of dimi...}
Theory of Consumers Behavior
Consumer's equilibrium
- Higher indifference curve gives a higher level of satisfactio...}
Theory of Consumers Behavior
Income effect: Derivation of ICC and Engel Curve for Normal and Inferior Goods
- If the income level of the consumer changes (i.e. either incr...}
Theory of Consumers Behavior
Price effect: Derivation of PCC and Demand Curve for Substitutes and Complementary Goods
- The price effect describes the phenomenon on the consumer&rsq...}
Theory of Consumers Behavior
Substitution Effect
- A change in the relative prices of goods makes a rational con...}
Theory of Consumers Behavior
Decomposition of Price Effect Into Income and Substitution Effect
- A change in demand for a commodity, say X, due to change in t...}