Monotonic preferences
Also called: Monotonicity · Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"
Meaning
A consumer has monotonic preferences if, of two bundles, she always prefers the one that has more of at least one good and no less of the other. Put simply, more is better. This assumption is why indifference curves slope downward and why a higher indifference curve means more satisfaction. It also means the consumer's best choice lies on the budget line, not below it.
Example
A monotonic consumer prefers (10, 10) to (10, 9), and (10, 9) to (9, 9). She cannot be indifferent between (10, 8) and (8, 6), because the first has more of both goods. If a friend says (5, 6) and (6, 6) are equally good, the friend's preferences are not monotonic.
Don't confuse with
- Diminishing MRS: monotonicity only says more is better. It does not say how the trade-off between goods changes as quantities change.
Related concepts
- Ordinal utility analysis
- Indifference curve
- Marginal rate of substitution
- Law of diminishing marginal rate of substitution
- Convexity of indifference curve
- Perfect substitutes
- Indifference map
- Properties of indifference curves
- Utility function
- Revealed preference