In the diagram on the right the consumer's original budget line is Ly, and the consumer buys the amount of good X at poi

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In The Diagram On The Right The Consumer S Original Budget Line Is Ly And The Consumer Buys The Amount Of Good X At Poi 1 (46.71 KiB) Viewed 53 times

In the diagram on the right the consumer's original budget line is Ly, and the consumer buys the amount of good X at point A. Then the price of good X decreases dramatically so that the consumer's new budget line shifts to L2. After the price decrease the consumer buys the amount of good X at point C. The substitution effect due to the price change is the movement from point A to point B The income effect due to the price change is the movement from point to point Good Y C с Based on the income effect, good X is good. دلا۔ L2 Good X