Price line indicates __________.

all possible combination for the consumer to buy with given income and prices of the two commodities

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all possible combination for the consumer to buy with given income and prices of the single commodity

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income of the consumer

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prices of related commodities

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Solution

The correct option is A all possible combination for the consumer to buy with given income and prices of the two commodities
All points on the budget lines are points of optimal efficiency. Wherein the consumer is maximizing his utility by utilizing his entire income. Points above the budget line are not attainable as it requires greater income.

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