How do the budget set and budget constraint change as p1 decreases from p1’ to p1”?

Original

budget set

x2

x1

m/p2

m/p1’

m/p1”

New affordable choices

Budget constraint

pivots; slope flattens

from -p1’/p2 to

-p1”/p2

-p1’/p2

-p1”/p2

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