Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 3 - Demand, Supply, and Market Equilibrium - Questions: 3c

Answer

The demand curve would increase and shift to the right.

Work Step by Step

When people have lower income, their demand for normal goods decreases whereas for the inferior goods it increases. Hence, since the small cars are inferior goods, and the income decreases, the demand for them would increase.
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