Question

A decrease in the demand for a good due to a decrease in consumer income leads to: a. movement along the demand curve and a lower equilibrium price. b. movement along the demand curve and a higher equilibrium price. c. a leftward shift of the demand curve and a lower equilibrium price. d. a rightward shift of the demand curve and a higher equilibrium price.

          A decrease in the demand for a good due to a decrease in consumer income leads to:
a. movement along the demand curve and a lower equilibrium price.
b. movement along the demand curve and a higher equilibrium price.
c. a leftward shift of the demand curve and a lower equilibrium price.
d. a rightward shift of the demand curve and a higher equilibrium price.
        
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Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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A decrease in the demand for a good due to a decrease in consumer income leads to: a. movement along the demand curve and a lower equilibrium price. b. movement along the demand curve and a higher equilibrium price. c. a leftward shift of the demand curve and a lower equilibrium price. d. a rightward shift of the demand curve and a higher equilibrium price.
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Transcript

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00:01 Here for the solution.
00:02 Step 1.
00:03 The explanation.
00:05 Law of demand states that the price of a good and quantity demanded of a good at a given time period are inversely proportional at centristis peribus.
00:21 That is when other things being equal.
00:24 So, the quality demanded of a good changes when the price of a good changes.
00:34 That is an increase in price produces the quantity demanded and a decrease in price increases the quantity demanded causing an upward and downward movement along the demand curve respectively.
00:52 Now, similarly, if the non -price determinants like income changes, then the demand curve will shift towards left or right depending on the change...
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