Question

With reference to the diagram shown above, select the reason for the movement from point M to N from the following options.

Options

• Increase in the real income of the consumer and rise in relative price of the commodity.

• Increase in the real income of the consumer and fall in relative price of the commodity.

• Decrease in the real income of the consumer and rise in relative price of the commodity.

• Decrease in the real income of the consumer and fall in relative price of the commodity.

Answer 1

Increase in the real income of the consumer and fall in relative price of the commodity.