Indifference curves tend to be bowed inward because of diminishing
A)marginal rates of substitution.
B)demand for the good as prices rise.
C)income.
D)Both a and b are correct.

Question

Quizplus · Accepted Answer

Indifference curves are bowed inward because of diminishing marginal rates of substitution. This means that as a consumer consumes more of one good, the marginal utility of that good decreases, making them less willing to trade it for another good at a constant level of satisfaction. As a result, the consumer becomes more selective about the combination of goods they are willing to consume, resulting in a bowed inward indifference curve.

Indifference Curves Tend to Be Bowed Inward Because of Diminishing