Income Effect For Perfect Substitutes
We maximize the utility when our budget line is tangent to the ic line.
Income effect for perfect substitutes. An indifference curve for perfect substitutes is a straight line. If the price of an inferior good falls the substitution effect will still cause a larger commodity. In fact it is the line defined by y const x for a utility level of const in bbb r. Enjoy the videos and music you love upload original content and share it all with friends family and the world on youtube.
Perfect substitute goods income effect if the budget increases the consumer will have a budget line farther away from the origin.
Source : pinterest.com