Shapes of Budget Constraints - Quantity Discounts
Suppose p2 is constant at $1 but that p1=$2 for 0 £ x1 £ 20 and p1=$1 for x1ᡌ. Then the constraint’s slope is - 2, for 0 £ x1 £ 20-p1/p2 = - 1, for x1 > 20and the constraint is
{
Previous slide
Next slide
Back to first slide
View graphic version