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Question
What will be the effect on equilibrium price and equilibrium quantity when income increases in case of normal goods?
Options
Both equilibrium price and quantity fall
Both equilibrium price and quantity rise
Equilibrium price rises and quantity falls
Equilibrium price falls and quantity rises
MCQ
Solution
Both equilibrium price and quantity rise
Explanation:
Normal goods are those whose demand rises as income rises and declines as income decreases. In the case of ordinary products, as income rises, demand rises, and the demand curve shifts to the right. As a result, both the equilibrium price and the equilibrium quantity.
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