As the price of a normal good falls, the income effect will result in an increase in consumption of the good.

Question

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When the price of a normal good falls, the purchasing power of consumers increases, leading to an increase in real income. This increase in real income, in turn, results in an increase in demand for the good, known as the income effect. When the price of a normal good falls, the purchasing power of a consumer's income increases, which leads to an increase in consumption of the good (income effect).

As the Price of a Normal Good Falls, the Income