A community indifference curve is an illustration of different combinations of commodity quantities that would bring a whole community the same level of utility.
The model can be used to describe any community, such as a town or an entire nation.
In a community indifference curve, the indifference curves of all those individuals are aggregated and held at an equal and constant level of utility.
Invented by Tibor Scitovsky, a Hungarian born economist, in 1941.
A community indifference curve (CIC) provides the set of all aggregate endowments
needed to achieve a given distribution of utilities,
The community indifference curve can be found by solving for the following minimization problem:
min
CICs assume allocative efficiency amongst members of the community.
Allocative Efficiency provides that
{\displaystyle MRS_{1}xy=MRS_{2}xy}
The CIC comes from solving for
in terms of
{\displaystyle y_{cic}({\bar {x}})}
Community indifference curves are an aggregate of individual indifference curves.
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