Assumption of Convex Preferences

… a core term used in Economic Analysis and Atlas102


The assumption of convex preferences is the assumption that consumers generally prefer “averaged” bundles rather than extremes and implies a diminishing marginal rate of substitution.

As noted in WikiBooks (reference below):

  • Convex preferences imply diminishing marginal rates of substitution. For any two goods, increasingly large amounts of one good are required to compensate for marginal losses of the other
  • Convex preferences may be interpreted as a desire for diversification in consumption
Atlas topic, subject, and course

Consumer Theory and Elasticity of Demand and Supply (core topic) in Economic Analysis and Atlas102 Economic Analysis.


WikiBooks, Advanced Microeconomics – Preference Relations, at, accessed 12 May 2016.

Page created by: Ian Clark, last modified 18 May 2016.