Demand: Utility | SparkNotes

Indifference curves are a fundamental tool in economics used to understand how consumers make choices between different combinations of goods that provide the same level of satisfaction or utility. The shape and position of an indifference curve depend on the preferences of the consumer and the availability of goods. By analyzing indifference curves, economists can identify the optimal combination of goods that provides the maximum level of satisfaction to the consumer, determine the elasticity of demand, analyze the impact of substitutes, and understand the impact of income on consumer behavior. Overall, indifference curves are a valuable tool for understanding consumer behavior and making informed decisions about resource allocation and policy-making.