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Assumption of Monotonic Preferences

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PPGPortal > Home > Concept Dictionary > A > Assumption of Monotonic Preferences
 
 
Assumption of Monotonic Preferences

The assumption that consumers would prefer more rather than less of the goods they consume. If we compare two consumption bundles and one of the bundles has more of all of the goods under consideration, that bundle is preferred by the consumer.

(Dwayne Benjamin, PPG 1002)

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For example, if bundle (x1, x2) is 5 cookies and 3 cupcakes and bundle (y1, y2) is 7 cookies and 5 cupcakes, the assumption of monotonicity tells us that bundle (y1,y2) is the more preferred bundle. This is so because there are more of both goods. This assumption would also hold if (y1,y2) contained 5 cookies and 5 cupcakes. In this case, there is the same amount of one good, but there is more of the other good.

     

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