economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

, a price-consumption curve represents how consumers' consumption bundles change as the price of one good changes while holding income,

preferences In psychology, economics and philosophy, preference is a technical term usually used in relation to choosing between alternatives. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to decision the ...

, and the price of the other good constant. Price-consumption curves are constructed by taking the intersection points between a series of

indifference curve In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is ''indifferent''. That is, any combinations of two products indicated by the curve will provide the c ...

s and their corresponding budget lines as the price of one of the two goods changes. Price-consumption curves are used to connect concepts of

utility In economics, utility is a measure of a certain person's satisfaction from a certain state of the world. Over time, the term has been used with at least two meanings. * In a normative context, utility refers to a goal or objective that we wish ...

, indifference curves, and budget lines to supply-demand models. At each price there is a single corresponding quantity of either good. Due to this, by modeling the good with the changing price as any particular good and the good with the unchanging price as all other goods, the price-consumption curve can be used to construct an individual's

demand curve A demand curve is a graph depicting the inverse demand function, a relationship between the price of a certain commodity (the ''y''-axis) and the quantity of that commodity that is demanded at that price (the ''x''-axis). Demand curves can be us ...

for any particular good. Similar (In fact, the same) models can be used to determine how firms in an economy determine the least-cost combination of factors of production to use when producing goods. When Price-consumption curves are used in this context, they are called price-factor curves and are constructed with

Isoquant An isoquant (derived from ''quantity'' and the Greek word ', , meaning "equal"), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more in ...

curves and a line representing the ratio between factor prices instead of indifference curves and a budget line.

References

{{Econ-stub Economics curves Utility Demand