Coupon Accepted Successfully!


What is a Price Line?

“Price line represents all the different combination of two goods that can be purchased by the consumer at a given level of income and prices of two goods”.
For Example: If the income of the consumer is ₹ 60/- and the consumer has to buy two products – say A & B, and the Price of commodity A is ₹ 15 and the Price of commodity B is ₹ 10, then the price line can be depicted as follows:
Description: 19604.png
The price line shows all those combination of two goods that the consumer can buy, if he spends all his income {combination N in the diagram}. It should be noted that combination beyond this line cann’t be had by the consumer {combination P in the diagram}. Similarly if he selects any combination below this price line (M), it shows underutilization of resources.

Test Your Skills Now!
Take a Quiz now
Reviewer Name