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What does mpc 2 stand for in economics11/27/2023 However, if it does not pass through the origin, APC will not be constant.ģ. The APC will be constant only if the consumption function passes through the origin. When MPC is constant, the consumption function is linear i.e., straight line. In other words, both the propensities decline with an increase in income, though the decline in one (MPC) is greater than the decline in the other (APC).Ģ. We have seen above that in case of a curved consumption function, as income increase, the MPC as well as the APC both decline, but the decline in the MPC is more than the decline in MPC.
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