Show graphically impact of price increase on the demand


Problem: Using a Slutsky decomposition (i.e. Total Effect = Substitution Effect + Income Effect), show graphically the impact of a price increase on the demand for a good which is inferior but not Giffen. Label your graph carefully and provide a detailed explanation of the effects illustrated, commenting on the direction of the substitution and income effects and their combination.

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Microeconomics: Show graphically impact of price increase on the demand
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