Consumer’s Budget

What is a Consumer Budget?

A consumer budget is the actual purchasing potential with which a consumer can purchase a set of two goods, provided their prices.

Now, let us contemplate that a customer has only a fixed amount of income to spend on two commodities. The marketplace furnishes the prices of goods. The customer cannot buy any or every combination of the two commodities.

The utilisation bundles that are obtainable to the customer rely upon the cost of the two commodities and the customer’s earning. Given a fixed income and the cost of the two commodities, the customer can manage to purchase only those bundles that cost less than or equal to the earnings.

This article is about the concept of consumer budget. To know more about such interesting economics concepts, stay tuned to BYJU’S.