Budget line is a line showing different combination of two goods that a consumer can attain at a given income and price of the goods.
Budget set refer to set of all possible combination of budget line Consumer can afford at his given income.
Actually the collection of different budget line is called the budget set.
Actually the collection of different budget line is called the budget set.
Factors affecting Budget Line :-
When, level of income changes …. with increase or decrease in income of the consumer new combination of a set of two goods will be attained.
When price of one good changes…. If the price of one good changes the consumer can increase or decrease the consumption of Other goods depending on the nature of change.
When price of both good changes... When The price of both good changes the consumer can increase or decrease the consumption of both the goods and new combination of sets of two goods will be attained.
Note.... A budget line is constructed on the basis of the consumer income price of one goods and price of another good therefore if any one of the determinant changes the budget line changes.
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