When the Price of a Normal Good Increases, the Substitution

question 185

Multiple Choice

When the price of a normal good increases, the substitution effect will:

• A) result in the quantity demanded going down so much that the income effect is unable to increase demand.
• B) work with the income effect to exert pressure on the quantity demanded to fall.
• C) work with the income effect to exert pressure on the quantity demanded to increase.
• D) work in a direction opposite the income effect.

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