Superiority of the Indifference Curve Technique
The indifference curve technique is superior to the Marshall utility analysis in several respects.Thus, Marshall confines himself precisely to a single-good model and is unable to analyses precisely and correctly mufti-good models and therefore the relationship of substitution and complimentary. The indifference curve technique. on the other hand. Gin successfully analyse all such cases. By given an ex Ira dimension. the indifference curve technique facilitates inter jocundity analysis which are of vital importance.Less Rest active remarkable thing about the indifference curve technique is that it arrives at the same equilibrium condition for a consumer as the Marshall anal is, but with less restrictive, and fewer assumption s than in Marshall’s analysis. It has already been explained that a consumer is in equilibrium where a price line is tangent to an indifference curve and, therefore, the marginal rate of substitution (MRS) is equal to the ratio of prices between the US. Thus, at P in our diagram.
This does it mean that MRS is found by measuring marginal liabilities of the good and then taking out their ratio. N IRS measures the ratio between the marginal utility es two goods directly, without actually measuring marginal utility.
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