what do you mean by budget line? what are the reason change in budget line
Answers
Answered by
1
Answer:
Budget line is a graphical representation of all possible combinations of two goods which can be purchased with given income and prices, such that the cost of each of these combinations is equal to the money income of the consumer.
Reasons :
1) Effects of a change in the income of Consumer
=> If there is any change in the income of the consumer, then budget line will shift.
2) Effects of change in Prices
=> If there is any change in prices of two commodities, assuming no change in money income of consumer, then budget line will change.
Similar questions