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Question
If a buyer buys less of a commodity when his income falls, how will his demand curve change? Illustrate your answer with a diagram.
Solution
A buyer will buy less commodities with a fall in income for a normal good. Such a situation is known as a decrease in demand. The given figure represents the situation of a decrease in demand A decline in demand due to a drop in income leads the demand curve to shift downhill or leftward.
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