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Microeconomic Theory

Notes
Fig. 4.30

Y

A

S IC
H
Q IC 1
Oranges E R

IC
2

O X
L N KB MH S N
Apples

4.27 Price Consumption Curve

If other units are remaining same, the effect of changes in price while consumer is stable is described by
Price Consumption Curve (PCC). PCC is the curve which represents the combination of product X and
product Y and which consumer will buy the product Y if the income and the price of product X are stable.
In the words of Ferguson and Maurice, “The price consumption curve is a locus of equilibrium
points relating the quantity of X purchased in relation to its price, money income and all other prices
remaining constant.”
4.28 Explanation

The Price Consumption Curve can be described with the help of Fig. 4.31. In this figure apples are on
axis OX while oranges are on axis OY. The budget line MQ shows that the income of consumer for

Fig. 4.31

Y

M

PCC
Oranges P P 1 P 2 IC

IC 2
IC 1

O X
A B QC Q Q
1 2
Apples

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