There is concentration of wealth in a few hands. Rich are becoming more rich and poor are becoming more poor. What impact will this diachotomy have on demand curve of a normal good? Use diagram. In your opinion, what should be done by the govt. to ensure justice and promote equity?

There is concentration of wealth in a few hands. Rich are becoming mor

1.	There is concentration of wealth in a few hands. Rich are becoming more rich and poor are becoming more poor. What impact will this diachotomy have on demand curve of a normal good? Use diagram. In your opinion, what should be done by the govt. to ensure justice and promote equity?
Answer» Solution :Due to unequal distribution of income, wealth is CONCENTRATED in a few hands. This will cause leftward shift in demand curve of the commodity from DD - `D_(1)D_(1)`. Gap between rich and the poor can be bridged through maintaining financial discipline by the government. Government can use measures of TAXES and SUBSIDIES to redistribute income. PUBLIC distribution system can be strengthened to ensure minimum consumption by all.