Using a Supply and Demand Graph,show What Happens to the Equilibrium

question 88

Essay

Using a supply and demand graph,show what happens to the equilibrium price and quantity for the following goods if,holding all else constant,income increases.
a.a normal good
b.an inferior good

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Definitions:

Inelastic Supply

A situation where the quantity supplied of a good or service is relatively unresponsive to changes in its price.

Excise Tax

A tax imposed on specific goods or services, such as tobacco, alcohol, and fuel, which is often used to discourage consumption or generate revenue for government projects.

Tax Burden

The impact of taxation on an individual or entity, often expressed as the total amount of tax paid or as a percentage of income.

Excise Tax

A tax levied on specific goods, services, or transactions, often with the aim of reducing their consumption or generating revenue.