If two consumers have identical preferences (indifference curve maps), does it follow that they cannot trade...

If two consumers have identical preferences (indifference curve maps), does it follow that they cannot trade to mutual advantage? Explain.

Expert Solution

So, if any individual [or first individual] ask for A bundle with IC1 then he will be getting much utility then the one with IC2. as for B and C bundle.

In such case individual will require to maintain the same utility and ask for same quantity at C and thus we have to do excess supply. Thus, trade here is not possible .

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Rahul Sunny answered 1 year ago

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