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

An increase in income would shift the demand curve for good A to the right, resulting in a new equilibrium at a higher price and quantity. This movement would be from point A to point B, where the new demand curve (D₁) intersects with the original supply curve (S). Therefore, the best choice is B.

Use the Figure Below to Answer the Following Questions