What Is an Indifference Curve?

An indifference curve (IC) is a line on a graph connecting all the bundles of two goods that give a consumer the same level of satisfaction. If you’re on a particular IC, every point along it makes you equally happy — you’re indifferent between them. Move to a higher IC (further from the origin), and you’re better off. Move to a lower one, and you’re worse off.

Think of it like a topographic map. Each contour line on a hiking map shows points at the same elevation. An indifference curve shows points at the same utility level. A whole set of ICs — an indifference map — describes the consumer’s complete preferences, just like a topo map describes the full terrain. Higher curves = higher utility = happier consumer.

Interactive — An Indifference Curve Map

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An indifference map showing three curves at different utility levels.

Key Term

Four Key Properties of Indifference Curves

Downward-sloping — To stay equally happy, giving up some of good X requires getting more of good Y. (Follows from non-satiation.)
Cannot cross — If two ICs crossed, the intersection point would be on both curves, implying two different utility levels for the same bundle — a contradiction.
Convex to the origin — Consumers prefer balanced mixtures to extremes. The curve bows inward.
Higher = better — Curves further from the origin represent higher utility. (Follows from non-satiation.)

Every point on an indifference curve yields the same utility level k

Why can’t indifference curves cross? Here’s the quick proof. Suppose curves $I C_{1}$ and $I C_{2}$ cross at point $A$ . Pick point $B$ on $I C_{1}$ only, and point $C$ on $I C_{2}$ only, where $C$ is clearly a better bundle. Since $A$ and $B$ are on $I C_{1}$ : $A \sim B$ . Since $A$ and $C$ are on $I C_{2}$ : $A \sim C$ . By transitivity: $B \sim C$ . But $C$ was supposed to be better than $B$ — contradiction. So ICs cannot cross.

Worked Example

A consumer has utility $U (x, y) = x y$ . Draw the indifference curve for $U = 12$ . Find three bundles on this curve and verify they all give the same utility.

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If a consumer is at bundle (3, 4) on an IC where U = 12, and they’re offered bundle (5, 5), are they better off?

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Test your understanding of indifference curves:

Why must indifference curves slope downward?

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