(a)[12]
Explain what consumer equilibrium means in economic theory.
(b)[13]
Discuss the conditions that would cause the demand for a good to (i) rise and (ii) fall after a fall in the good's price. Use indifference curve analysis to support your answer.
- Discuss the conditions that would cause demand for a good to increase following a fall in the price of the good. Support your answer with indifference curve analysis. [7]
- Discuss the conditions that would cause demand for a good to decrease following a fall in the price of the good. Support your answer with indifference curve analysis. [6]