Question Three In the market for Corn kenkey (INFERIOR GOOD), consumers’ income has decreased. In that same market, the prices of raw materials used for producing corn kenkey has also decreased. Using your knowledge in demand and supply, draw and analyse the effect of these simultaneous occurrences on the equilibrium price and quantity respectively if the magnitude of income decrease is smaller than the decrease in raw material prices.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
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Question Three In the market for Corn kenkey (INFERIOR GOOD), consumers’ income has decreased. In that same market, the prices of raw materials used for producing corn kenkey has also decreased. Using your knowledge in demand and supply, draw and analyse the effect of these simultaneous occurrences on the equilibrium price and quantity respectively if the magnitude of income decrease is smaller than the decrease in raw material prices.
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