c) Due to the COVID pandemic, XYZ Company announced an across the board 40% decrease in employee income for 2020. Mutiso, an employee of XYZ found the going increasingly tough, as he discovered he was no longer able to afford some of the essential goods and services he had hitherto been able to afford. Required: Using demand curve(s), represent the Mutiso’s situation in 2020.
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Expert's answer
2021-10-31T18:25:12-0400
The decrease in income will cause the decrease in the demand for essential goods and services, as they are normal goods with positive income elasticity.
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