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Explain the effect of increase in income of the consumer on demand for a good. |
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Answer» Solution :If the commodity is a normal good, then an INCREASE in the income of the consumer leads to an increase in DEMAND for the commodity or the demand curve SHIFTS rightward. On the other hand if the commodity is an INFERIOR good, then an increase in income of the consumer leads to a decrease in demand of the commodity or the demand curve shifts LEFTWARD. |
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