A consultant recently provided the firm's marketing manager with this estimate of the demand and supply functions for the firm's product: Qd = 140 - 3P; Qs = 20 + 2P. When both equations are plotted, the resulting chart is the following. Assuming this is a 'normal good,' how will both charts behave if (1) the consumer's income per capita decreases and (2) the price of a critical input increases (choose the closest one)?
1) Can't be predicted.
2) Qd will move downward, and Qs will move upward.
3) Qd will move upward, and Qs will move upward.
4) Qd will move downward, and Qs will move downward.
