What is price consumption curve?

The price consumption curve is a graphical representation of the relationship between the price of a good or service and the quantity that consumers are willing and able to purchase at that price. It is a downward-sloping curve that shows how the quantity demanded of a good or service changes in response to changes in its price.

The price consumption curve is typically derived from consumer theory, which posits that consumers seek to maximize their utility or satisfaction when making purchasing decisions. As the price of a good or service decreases, consumers are able to purchase more of it, leading to an increase in quantity demanded. Conversely, as the price of a good or service increases, consumers are less likely to purchase it, leading to a decrease in quantity demanded.

The price consumption curve can be used to analyze consumer behavior, predict changes in demand for a particular product, and inform pricing strategies for businesses. It is often used in conjunction with the income consumption curve, which shows how changes in income affect consumer demand for a good or service.