WHY IS THE INDIFFERENCE CURVE CONVEX TO THE ORIGIN?
IN THIS VIDEO I HAVE EXPLAINED WHY THE INDIFFERENCE CURVE IS CONVEX TO THE ORIGIN, NOT CONCAVE. THE CONVEXITY OF THE INDIFFERENCE CURVE ALLOWS THE MRSxy TO FALL, WHICH IS MUST FOR AN INDIFFERENCE CURVE. BUT CONCAVE INDIFFERENCE CURVE GIVES RISING MRSxy. MORE OVER THE CONSUMER REACHES EQUILIBRIUM WHERE THE IC IS TANGENT TO THE BUDGET LINE. HERE THE CONSUMER DERIVES MAXIMUM SATISFACTION. BUT IN THE CASE OF A CONCAVE INDIFFERENCE CURVE, AT THE POINT OF TANGENCY BETWEEN THE IC AND THE BL THE CONSUMER GETS THE LEAST SATISFACTION. HENCE IC CANNOT BE CONCAVE TO THE ORIGIN, IT IS CONVEX TO THE ORIGIN.