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Question
What is the "price line"?
What is the "price line"?
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Solution
A price line is a line showing different combinations of two goods that a consumer can attain, given his income and the market price of the goods.
Priceline is the graphical representation of the relationship between the quantity of output sold and its price. It is a horizontal straight line in the case of a perfectly competitive market where the price is equal to average revenue and marginal revenue.
The price line is also known as the AR line. The price of a commodity is equal to the AR of a firm at each level of output.
A price line is a line showing different combinations of two goods that a consumer can attain, given his income and the market price of the goods.
Priceline is the graphical representation of the relationship between the quantity of output sold and its price. It is a horizontal straight line in the case of a perfectly competitive market where the price is equal to average revenue and marginal revenue.
The price line is also known as the AR line. The price of a commodity is equal to the AR of a firm at each level of output.
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