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Question
What is meant by monotonic preferences?
Solution
A monotonic preference means that a rational consumer always prefers more of a good as it offers the consumer a higher level of satisfaction. A consumer may have different preference sets corresponding to the different levels of income.
RELATED QUESTIONS
What do you mean by monotonic preferences?
If the consumer has monotonic preferences, then can he/she be indifferent towards bundles (10, 8) and (8, 6)?
Suppose a consumer’s preferences are monotonic. What can you say about his/her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?
Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
Answer the following question:
How would the demand for a commodity be affected by a change in the "tastes and preferences" of the consumers in favour of the commodity? Explain using a diagram.
Explain the following condition:
Shift from a lower to a higher indifference curve.
