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Course: Macroeconomics > Unit 1

Lesson 6: Markets

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Changes in equilibrium

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Assume that milk is an inferior good.

Assuming all other factors remain constant, if the income of milk buyers increases, what will happen to the equilibrium price and quantity of milk?

(Choice A)
We cannot determine what happens to price, but quantity will increase
(Choice B)
Price will decrease and quantity will increase
(Choice C)
Price will decrease and quantity will decrease
(Choice D)
Price will increase, but we cannot determine what happens to quantity
(Choice E)
Price will increase and quantity will decrease