Indifference Curves - Income and Substitution Effects for Inferior Goods

[@tutor2u-official]

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[@adityamisra8869]

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[@tokyo7671]

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[@tutor2u-official]

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[@coolnotcold.]

This is so helpful!! Thank you so much!!

[@nonstickbrute7941]

Thanks a lot, makes sense now

[@Zeshanwaleed]

I have one question you have make the graph for price decrease but in the case of price increase than would we make that graph other than budget line moves to left?

[@MaryChihana-bv8rh]

Nyc enjoyed the video

[@rainavinayak1945]

Hello! Will the concept and the diagram apply to giffen goods as well or do giffen goods have a different diagram?

[@cocodee7863]

Giffen goods will be different because the income effect tends to be bigger than the substitution effect. That's how I try to differentiate between the 2

[@omarmuneer9739]

In this example, does this make Nuts a normal good (as we buy more nuts due to the income effect) or can we not tell from this graph?

[@francescomondini7065]

how do inferior goods react when their price increases?

[@tutor2u-official]

Sales fall because the substitution effect out weighs the income effect

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[@Lostsoulz9]

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[@tutor2u-official]

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