Write definition and equation of price line or budget line.
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Equation of a Budget Line
Px is the cost of product X. Qx is the quantity of product X. ... Qy is the quantity of product Y. M is the consumer's income.
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Definition and equation-
A budget line is a straight line that slopes downwards and consists of all the possible combinations of the two goods which a consumer can buy at a given market price by allocating all his/her income. Therefore, the numerical slope of the budget line is px / py which is equal to the ratio of the prices of X and Y.
A budget line is a straight line that slopes downwards and consists of all the possible combinations of the two goods which a consumer can buy at a given market price by allocating all his/her income. Therefore, the numerical slope of the budget line is px / py which is equal to the ratio of the prices of X and Y.
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