For most normal goods, the income effect and the substitution effect work in the same direction; so
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For most normal goods, the income effect and the substitution effect work in the same direction; so when the price of a good falls, both the income and substitution effects lead to a higher quantity demanded. How would this change if the good is an inferior good?
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When a good is considered inferior its demand decreases as consumer income rises This phenomenon hap...View the full answer
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Related Book For 
Mylab Economics With Pearson Access Code For Principles Of Microeconomics
ISBN: 9780135197141,9780135197103
13th Edition
Authors: Karl E. Case; Ray C. Fair; Sharon E. Oster
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