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PostHeaderIcon Price Consumption Curve

If the price of one commodity (x) changes a new set of combinations (x, y) is created between the changing tangents of the budget line and indifference curves forming the ‘price-consumption curve’ for the commodity (x) – assuming constant income and prices of the other commodity (y). The price-consumption curve shows how much of a commodity (x) is purchased if its price changes – assuming constant income and constant prices for the other good (y).

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February 2012
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