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CFA Level 1
Economics

Effect on Demand Curve due to Income and Substitute Price Changes

Medium Microeconomics Demand And Supply Analysis

In a certain market, the demand for a good is affected by changes in consumer income and the prices of related goods. Suppose the following changes occur:

1. The consumer income decreases.

2. The price of a substitute good increases.

Considering these changes, what can be inferred about the effect on the demand curve for the original good?

Hint

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