Use a well labelled diagram and illustrate the consumer equilibrium by drawing a budget constraint and an indifference curve . There will be amount of good X on the x-axis and amount of good Y on the y-axis. Then decrease the price of good X and illustrate the effect of a decrease in the price of good X by dividing the total effect into substitution effect and income effect considering that good X is an inferior good . Explain the meaning of the income and substitution effects of a price change.

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