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Why do Indifference curves not intersect each other ? |
Answer» SOLUTION :(i) Two IC.s cannot INTERSECT each other . This property is PROVED by Contradict Method . First we assume that they intersect each other and then show that this assumptionleads to an absurd conclusion. Let us assume that `"IC"_1` intersects `IC_2` at point E show in the FIGURE given here.  (ii) Let point A be a point on `"IC"_1` and pint B on `IC_2` . Since A and E lie on `"IC"_1` the consumer will be indifferent between points E and A ( A = E) . Similarly , B and E lie on `IC_2` , the consumer will be indifferent between points E and B (B = E) (iii) Based on the assumption of transitivity as A = E and B = E , then the consumer must be indifferent between A and B (A = B) but this is not possible as A and B lie on two different ICs and represent different LEVELS of satisction. Therefore , IC cannot intersect each other. |
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