A consumer considers Coke and Pepsi to be perfect substitutes for each other. What would the consumer's indifference curves for these two goods look like?
A)L-shaped
B)horizontal along the entire length
C)vertical along the entire length
D)upward sloping
E)downward sloping with a constant slope

Question

Quizplus · Accepted Answer

Since Coke and Pepsi are perfect substitutes, the consumer is indifferent between them and therefore their indifference curves will be straight lines. Since the slope of the indifference curve indicates the rate at which the consumer is willing to substitute one good for the other, the slope must be constant. Therefore, the indifference curves will be downward sloping with a constant slope.

A Consumer Considers Coke and Pepsi to Be Perfect Substitutes