Economy, asked by naritlepcha152, 2 months ago

What
would be the nature of income effect for normal and interior goods ​

Answers

Answered by azill845
0

In the case of a normal good, higher real income leads to an increase in quantity demanded; this complements the increase due to the substitution effect. ... In the case of an inferior product, the income effect leads to a fall in the quantity demanded, which will work against the substitution effect.

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