Suppose that, from an initial consumer equilibrium position, the price of good X falls while the price of good Y remains the same. Using indifference curve analysis, explain how and why the consumer's relative consumption of the two goods will change.© BrainMass Inc. brainmass.com October 24, 2018, 10:12 pm ad1c9bdddf
Consumer Behavior: Indifference Curve Analysis
An indifference curve is the locus of various combinations of two commodities at which a consumer is indifferent or each of which gives him a same level of satisfaction. Indifference curve analysis is an approach of theory of consumer behavior. It provided a more general theorem of demand based on several assumptions such ordinal measurement of customer satisfaction, consistency and transitivity in preferences, division of goods into smaller units, rationality of the consumer, diminishing MRS, etc.
The consumer attains equilibrium at the point where he would maximize his satisfaction. The conditions for consumer equilibrium are as follows:
? At equilibrium point price line should be tangent to the ...
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Airline Economic Analysis
The Boeing Aircraft Company has dominated the commercial aircraft market for decades, but its position of influence has lessened in recent years. Its chief competitor, Airbus, has made significant market gains, and may be posed to become the number one producer of commercial aircraft in the near future.
Where the rivalry is likely to head, and the most probable outcome of their ongoing competition. What data and numbers can use to show an economic analysis of the situation (supply, demand, elasticity, indifference curves, consumer behavior, and production and/or cost functions)?View Full Posting Details