Answer to Question #310912 in Microeconomics for Avela

Question

Due to substintial increase in price in country A ,the real income level of population in country A decrease.show a diagram shows how the decrease in the income level in country A will affect the demand for meat which is a normal good

Answer 1

Decrease in consumer income due to an increase in the price of goods will lead to a decrease in the demand of meat. The demand will decrease because of the reduction in consumer income. The consumers will not be having adequate income to purchase meat and also purchase other goods that are mandatory in their homes. Therefore, consumption of meat will reduce since less people will be at a position to afford it without foregoing other goods.