Question

Explain the following:

What will be the shape of an indifference curve when Two goods are complementary?

Answer 1

When two goods are perfect complements, they are consumed together in fixed proportions (e.g., shoes and shoelaces). The consumer derives satisfaction only when both goods are used in a specific ratio. In this case, the indifference curve is L-shaped or right-angled, reflecting that increasing only one good does not increase utility unless the other good increases proportionally.