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In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. If X is a normal good, an increase in income will

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Answer:

increase D, increase P, and increase Q

Explanation:

Normal goods are goods that have an increase in demand when consumers' income gets higher. Likewise, suppliers get more incentive to supply the goods, making the equilibrium quantity higher too. The price also follows the same tendency. Since normal goods have an elastic dependency between income and demand, a good's income elasticity of demand is a determiner whether a good is normal or luxury. Typical normal goods include food, clothing and appliances.

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