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Figure 4.17 Quantity Limits and the Budget Constraint
When there is a limit on how much of a good a person can consume, a budget constraint will be kinked. When Alex is limited to 600 minutes on the phone per month, his budget constraint is horizontal at that quantity. The triangle above the horizontal section of the budget constraint and below the dashed line represents the set of phone minutes and pizzas that are now infeasible for Alex to buy. Note that Alex can still afford these sets since his income and the prices have not changed, but the restrictions on how much he can purchase dictate that he cannot buy them.