Real Income
n The increase in the price of dental services
has also reduced our real income - we can
now buy less than before with our money
income.
–  The way which we react to this change in real
income depends on the kind of good or service.
– Is dentistry a normal good ?(an increase in income
leads to an increase in demand and vice versa. So
a fall in real income will further reduce the amount
of treatment bought (income effect).