Does an increase in income always shift demand curves (for goods) to the right why or...
Does an increase in income always shift demand curves (for goods) to the right why or why not?
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Homework Answers
An increase in income does not always shift demand curves (for goods) to the right, it depends on the type of good.
For a Normal good, increase in income shifts the demand curve (for goods) to the right. As income increases, we demand more of such goods.
For an Inferior good, increase in income shifts the demand curve (for goods) to the left. As income increases, we demand less of such goods.
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