Changes in Price: Suppose that the price of one of the commodities changes. Just as above, we only change one parameter at a time. Thus, to investigate the effects of a change in the price of Snickers, the easiest way is to hold the price of Coke as well as Income fixed. Of course, we could allow more than one parameter to change, but that would make the analysis more complicated than needed.
Suppose the price of Snickers, the good on the horizontal axis, decreased by 10%. What happens to the budget constraint? With no change in the price of Snickers and no change in income, the vertical intecept remains unchanged. However, the horizontal intercept expands by 10% reflecting the fact that the 10% decrease in the price of Snickers has increased the maximum Snickers affordable. Thus, the budget constraint has rotated out; the vertical intercept is unchanged, but the slope is flatter representing the new, lower rate of tradeoff for each purchase of the now less expensive Snickers. You can verify this by looking at equation (2) above. The slope term, -(PS/PC) now has a smaller number in the numerator, meaning the curve is flatter.

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