![price consumption curve price consumption curve](https://image.slidesharecdn.com/3550ch4-131010111445-phpapp01/95/price-consumption-curve-25-638.jpg)
On the upper side of the budget plane, the curves A i will form the edges of a corner at Q, say Λ. In the passage through Q for falling (rising) prices, the 2n+1 curves A i, B i, C will pass through the budget plane σ p iq i=μ from below (above). It is a rather typical situation that a curve A i will be more or less perpendicular to the corresponding curve B i. In the case of n goods, all of the 2n curves A i, B i will in general be different. In this passage, C is intermediate between A 1=B 2 and A 2=B 1. Considering the passage through Q for falling (rising) prices, the three curves A 1=B 2, A 2=B 1 and C will pass through the budget line p 1q r+p 2q 2=μ from below (above). In the case of two goods, n=2, the price-consumption curves A 1 and B 2 will coincide, and likewise A 2 and B 1. 3, finally, we examine the orientation of the curves A i anaiogous results are obtained for the curves B i. Certain simple interrelations between these curves are pointed out in no. The equations of the curves A i, B i, C are given in no. The price-consumption curves A 1 and B i and the income-consumption curve C form a convenient geometric representation of the demand functions of the consumer. There are n such curves which pass through Q, say B 1, …, B n. The optimal budget will then describe a certain curve, say B 1 this will be called a price-consumption curve of type B. Third, suppose in the inflatory situation that one of the prices, say p i, is held fixed. Thus the optimal budget will describe what is known as the income-consumption curve which passes through Q, say C. In the staic theory of indifference maps this is equivalent to allowing μ to vary while all prices are held fixed. Second, consider an inflatory situation where all prices vary in proportion, while income μ is constant. Making i=1, …, n we obtain n such curves passing through Q, say A 1, …, A n. Now in the first place, if one price is allowed to vary, say p i, while the income and the other prices are held fixed, the optimal budget will describe a curve known as a price-consumption curve.
![price consumption curve price consumption curve](http://www.expertsmind.com/CMSImages/634_individual%20demand2.png)
Given the prices p 1 …, p n and his income μ, let Q=( q 1, …, q n) be the consumer’s optimal budget. As an illustration of this theory we examine in this note the demand reactions of an individual consumer in three situations. The theory of indifference maps is a static theory for consumer’s behaviour.