Diagrammatically explain concept of income effect and price effect sho – InterviewSolution

1.	Diagrammatically explain concept of income effect and price effect show the manner in which price effect can be slipt up into income and substitution effects
Answer» The substitution effect is the change in X* in going from A to C, while the income effect is the change in x* in going from C to B. To find C, use the original indifference CURVE and find the point of tangency with a fictitious budget constraint that has the NEW price ratio.please mark it as a brainliest answer and FOLLOW me

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