Suppose that we illustrate demand and supply with quantity on the horizontal axis and income on the vertical axis. Let demand be a function of price and income, Qd (P, I) . Which of the following statements is true?
A) A change in income will cause a shift in the demand curve.
B) A change in income level is represented by a movement along the demand curve.
C) Income is treated as an exogenous variable in the graphical analysis.
D) Price and income together must change in order to create a shift in the demand curve.
Correct Answer:
Verified
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