Practicing Success
What will happen to the budget line when there is a decrease in prices of two goods say bread and milk? |
Shift rightward parallelly Shift leftward parallelly Shift rightward only for milk Shift rightward only for bread |
Shift rightward parallelly |
Budget line will shift to the right, indicating that more of both the goods can be bought with the same income. As, prices of both the goods have been decreased resulting a parallel rightward shift in the budget line. |