When the price of a good changes, the consumer purchases a different optimal bundle of the two goods in response to the price change. Each time the price of a good changes, the optimal bundle changes. The Price Consumption Curve, or PCC, shows the collection of optimal bundles of two goods that a consumer purchases, given the changes in the price of one good. For example, as the price of books decreases, the student purchases a different optimal bundle. Similarly, when the price of books increases, they purchase another optimal bundle. By connecting all the optimal bundles across the price changes, the PCC for books is derived.
When analyzing the PCC, the effect of changes in the price of one specific good is observed while keeping the consumer's income, preferences, and the prices of the other good constant. This helps reveal how a consumer's optimal consumption bundle adjusts in response to price changes of that particular good whose price changes.
