The income effect helps explain the shape of a consumer's demand curve.

Name: The income effect helps explain the shape of a consumer's demand curve.
Brand: Quizplus
Rating: 4.8 (36 reviews)

Question

Quizplus · Accepted Answer

The income effect refers to how a change in a consumer's income affects their buying behavior. As a result, it can help explain why a consumer's demand curve shifts, either increasing or decreasing, due to a change in their income level. Therefore, the income effect is an important factor in shaping a consumer's demand curve.

The Income Effect Helps Explain the Shape of a Consumer's