Question

24

will(Click to select). This will cause the If the income of buyers decreases and good A is a normal good, the (Click to selec equilibrium price to( (Click to select) and the equilibrium quantity tol (Click to select)

Answer 1

If the income of buyer decreases and good A is a normal good, the demand will decrease. This will cause the equilibrium price to remain constant and the equilibrium quantity to decline.

As we know when consumers income increases then the demand of Normal good too increases at all prices. When consumer income decreases the demand for normal good declines. Thus, will a lower income consumer will demand less quantity of Normal good and more of inferior good.

Thus, the normal good demand curve will shift to its left there will be no impact on the price but at every price the quantity demanded will be less therefore, the equilibrium quantity will decline.

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