Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices.What would we expect to occur in this market?

Question

Quizplus · Accepted Answer

A decrease in buyers' incomes would reduce demand for a normal good, leading to a lower equilibrium price. A reduction in input prices would increase supply, also leading to a lower equilibrium price. The combined effect on equilibrium quantity is ambiguous because the decrease in demand would reduce quantity, while the increase in supply would increase quantity.

Suppose the Incomes of Buyers in a Market for a Particular