What is a kinked budget line?

A kinked budget line represents a situation in consumer choice theory where a consumer faces different prices or constraints for different quantities of goods. This creates a point of "kink" where the slope of the budget line changes, indicating a shift in the rate at which one good can be substituted for another. The kink highlights how consumers may adjust their purchasing behavior based on price changes or limitations in their budget, leading to different optimal consumption points. This concept is often used to analyze scenariOS involving price discrimination or varying quantities of goods.