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The Theory Of The Firm Under Perfect Competition
Question
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 How does an increase in income affect equilibrium price of a product?

Answer

Increase in income causes an increase (decrease) in equilibrium price and quantity exchanged for a normal (inferior) good.

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Some More Questions From The Theory Of The Firm Under Perfect Competition Chapter

 Define the term market as used in economics.

What is meant by monopolistic competition?

What are selling costs?

Define homogeneous product.

What is meant by differentiated product?

 Define perfect competition.

 Is the seller under perfect competition a price maker or a price taker? 

Define monopoly.  

Define market equilibrium. 

Can a seller under monopolistic competition influence the price?