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Definition of Corner Solutions: The corner solution is a choice made by an agent that is at a constraint, and not at the tangency of two classical curves on a graph, one characterizing what the agent could obtain and the other characterizing the imaginable choices that would attain the highest reachable value of the agents' objective.

A classic example of a corner solution is the intersection between a consumer's budget line (characterizing the maximum amounts of good X and good Y that the consumer can afford) and the highest feasible indifference curve. If the agent's best available choice is at a constraint -- e.g. among affordable bundles of good X and good Y the agent prefers quantity zero of good X -- that choice is often not at a tangency of the indifference curve and the budget line, but at a "corner"

. Contrast corner solution with interior solution. (Econterms)

Terms related to Corner Solutions:

• Interior solution

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