If Good a Is a Normal Good and Income Increases

question 290

Multiple Choice

If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________.

• A) rises; increases
• B) rises; decreases
• C) falls; decreases
• D) falls; increases

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Definitions:

Product Promotion

Activities undertaken to inform potential customers about a product or service, encouraging its purchase.

Real Characteristics

Essential and tangible attributes or features of goods, services, or economic conditions that can be measured and evaluated.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the profit beyond the normal return on investment.

Profit-Maximizing

The strategy businesses use to generate the highest possible profit, typically by adjusting price, output, or other operational variables.