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If a Buyer Buys Less of a Commodity When His Income Falls, How Will His Demand Curve Change? Illustrate Your Answer with a Diagram. - Economics

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Short Note

If a buyer buys less of a commodity when his income falls, how will his demand curve change? Illustrate your answer with a diagram.

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Solution

A buyer will buy less commodities with a fall in income for a normal good. Such a situation is known as a decrease in demand. The given figure represents the situation of a decrease in demand. In the figure, OP is the original price at which the quantity demanded is OQ. With a fall in income, demand decreases to D1.

Concept: Evolution of Money
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