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    Price equilibrium and demand curve

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    Discuss how each of the following will affect the price and quantity of equilibrium. To determine the new values, discuss how the supply and/or demand curves will shift in the following cases (if at all).
    a. Income diminishes and the good is a normal good.
    b. Minimum wage increases

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    Solution Preview

    Discuss how each of the following will affect the price and quantity of equilibrium. To determine the new values, discuss how the supply and/or demand curves will shift in the following cases (if at all).

    a.Income diminishes and the good is a normal good.

    A person's preference of a good can be characterized as normal or inferior. A ...

    Solution Summary

    This solution discusses the effect of diminishing income on the price and quantity of equilibrium. Besides the effect of minimum wage on price and quantity of equilibrium is also discussed.

    $2.19