Price line or Budget line
The price line, which represents the price of the goods and consumer’s money income. Suppose a consumer has got income of Tk. 50 to spend on goods X and Y. let the price of the good X in the market be Tk. 10 per unit and y be Tk. 5 per unit.
Fig : Price line or Budget line
With Tk. 50 he can buy 5 units of good X and no Y and 10 units of good Y and no X. By joining the point P and L we get what is called price line or Budget line. This line shows all possible combinations of two goods that the consumer can buy if he spends the whole of his given sum of money or he purchases at the given prices. With Tk. 50 he can also buy 8 Y and 1 X or 6 Y and 2 X or 4 y and 3x etc.
The price line, which represents the price of the goods and consumer’s money income. Suppose a consumer has got income of Tk. 50 to spend on goods X and Y. let the price of the good X in the market be Tk. 10 per unit and y be Tk. 5 per unit.
Fig : Price line or Budget line
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