For a normal good, if incomes rise, we would expect that the equilibrium price will increase and that the equilibrium quantity will increase.

Question

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When people's incomes increase, their purchasing power increases as well. With a normal good, people tend to buy more of it as their income rises. As a result, demand for normal goods increases, causing the equilibrium price to increase. This increase in demand also results in an increase in the equilibrium quantity.

For a Normal Good, If Incomes Rise, We Would Expect