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11. The economy is experiencing a recession. Suppose ramen noodles is an inferior good. What happens to the equilibrium quantity of ramen noodles?

8:29 CH Th 6 30 thg 989% Times New Roma 14 BIA 1 11. The economy is experiencing a recession. Suppose ramen noodles is an inf
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Answer : 11) For inferior goods if income increase then demand decrease and if income decrease then demand increase. In recession the consumers income decrease. And here ramen noodles is an inferior good. So, in recession the demand for ramen noodles will increase. This will shift the demand curve for ramen noodles to rightward. As a result, the equilibrium quantity will increase for ramen noodles in recession.

12) Based on given diagram shifting the demand curve from D1 to D3 shows the leftward shifting of demand curve. If demand decrease then the demand curve shift to leftward. Demand decrease for a good for many reason. One of them is changes in consumer test and preference for that good. Here the demand curve shifts from D1 to D3 may be for changes in consumer test and preference for laptops. If consumers do not like to purchase laptops due to changes in test and preferences then the demand for laptops decrease. This shift the demand curve to leftward and become D3 from D1.

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