Indifference price

Imagine you have two favorite toys, a red ball and a blue ball, and you love them both the same. Your mom wants to buy you a new toy, but she doesn't know which one you like better. She asks you, "Would you be happy with a new red ball or a new blue ball?" And you say, "I don't care, as long as I get a new ball."

That's kind of what an indifference price is. It's the price where you're equally happy to buy one thing or another thing. It's like saying, "I don't care which one I get as long as I get one." For example, let's say you want to buy a new car. You have two options: a sports car and an SUV. The sports car costs $50,000, and the SUV costs $60,000. You like them both, but you don't like one more than the other. The indifference price would be the price where you don't care which one you get. Maybe it's $55,000. If you can find a sports car for $55,000, you'd be just as happy as if you got the SUV for $60,000.

So, the indifference price is the point where you're willing to pay the same amount for two things. It's the price where you don't have a preference for one thing over another.