What is budget line or price line?

Budget line definition The budget line is a graphical delineation of all possible combinations of the two commodities that can be bought with provided income and cost so that the price of each of these combinations is equivalent to the monetary earnings of the customer.

What is a price line?

A price line is a line showing different combinations of two goods that a consumer can attain, given his income and the market price of the goods. Priceline is the graphical representation of the relationship between the quantity of output sold and its price.

Are budget line and price line same?

Budget line is also called the price line, price opportunity line and consumption possibility curve.

What is the budget line called?

Budget line is therefore called the price line, price opportunity line and consumption possibility curve as well.

What is the slope of budget line or price line?

The slope of the budget line is the is the ratio of the prices of good 1 and good 2. This would mean price of good on the x axis divided price of goods on the y axis. The slope of a budget line is always negative as it is downward sloping.

Why budget line is called a price line?

Budget line is also called price line beacause the slope of Budget Lineis the ratio of prices of goods taken on each axis in 2-D diagram.

What is budget line example?

Example of Budget Line



Suppose a consumer has an income of Rs. 50, and it will be used to buy commodities X and Y. To derive maximum utility from the said income, only the following options are available. The required budget line is obtained by plotting the above budget against the following graph.

What is budget line formula?

The budget line shows all the different combinations of the two commodities that a consumer can purchase, given his money income and the price of two commodities. The equation of a budget line is given by: M=PX. QX+PY.

What is the purpose of budget line?

A budget line shows the combinations of two products that a consumer can afford to buy with a given income – using all of their available budget.

What is price line in curve?

Price line or firm’s demand curve is the same as firm’s AR curve, because AR means price, and demand curve (or AR curve) shows the relationship between price and quantity demanded of firm’s output. Was this answer helpful?

What is a budget line one word answer?

It is a line showing different combinations of a set of two goods that the consumer can buy, given his income and price of the goods.

How do you make a budget line?


Quote from video: Function so the graph must be a straight line the intercept is equal to M over P 2 and the slope is equal to minus p1 over p2. The intersection with the x-axis. Must be at x1 equal to M over P 1.

What is another name of price line?

The other name of Budget line is Price line. “A budget line or price line represents the various combinations of two goods which can be purchased with a given money income and assumed prices of goods”.

Why is it called indifference curve?

Quote from video: Похожие запросы

What is price line in curve?

Price line or firm’s demand curve is the same as firm’s AR curve, because AR means price, and demand curve (or AR curve) shows the relationship between price and quantity demanded of firm’s output. Was this answer helpful?

What is price line under perfect competition?

Since the market price is fixed at p, we obtain a horizontal straight line that cuts the y-axis at a height equal to p. This horizontal straight line is called the price line. It is also the firm’s AR curve under perfect competition The price line also depicts the demand curve facing a firm.

What is price line in international economics?

Price line is a line showing different combinations of two goods which a consumer can attain, given his income and market price of the goods.

What is the equation of price line?

Therefore, the numerical slope of the budget line is px / py which is equal to the ratio of the prices of X and Y. Since the numerical slope of the line represents the price ratio, or, the relative price of good X in terms of good Y, this line is also called the price line.

What is budget formula?

According to Miller, a budget formula is an objective procedure whereby quantitative data dealing with the relation ships between programs and costs are manipulated in such a manner as to arrive at an estimate of future budgetary requirements [10, p.

What is the purpose of budget line?

A budget line shows the combinations of two products that a consumer can afford to buy with a given income – using all of their available budget.