When the price of a good rises, which statement is correct in the analysis based on budget lines and indifference curves?
- AThe income and substitution effects of the price increase will work in opposite directions in the case of a Giffen good.
- BThe income effect of the price increase will result in reduced consumption for all goods.
- CThe new equilibrium position will be where the new budget line meets the original indifference curve.
- DThe price rise will be represented by a parallel shift inwards of the original budget line.