Use the figure below to answer the following questions. Figure 3.5.1
-Initially,the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

Question

Use the figure below to answer the following questions.

Figure 3.5.1
-Initially,the demand curve for good A is D₂ in Figure 3.5.1.If income increases and A is a normal good,we would expect to see a movement from point A to point

Quizplus · Accepted Answer

If A is a normal good and income increases, the demand for A will increase. This will cause a shift in the demand curve to the right, from DS1U1B1 to DS2U2B2. The new equilibrium point will be at point B, where the new demand curve intersects the original supply curve.

Use the Figure Below to Answer the Following Questions