How would the equilibrium price and quantity for TV dinners change if the average annual income in Canada increases? Explain your answer using a graph.

Question

How would the equilibrium price and quantity for TV dinners change if the average
annual income in Canada increases? Explain your answer using a graph.

Answer 1

As with all the questions you asked, you are shifting supply or demand curves. In this case, you would shift the demand curve. You have to make a call whether an increase in income means less demand for tv dinners or more. I would argue it may decrease demand because if people make more money, they may splurge for something better or more expensive. But you cna justify your answer. Either way, just shift the demand curve left or right. If demand goes down - left. Then the equilibrium price and quantity would be less. Use the same logic for the other questions.