If a Good Is Normal and Its Price Increases

question 13

Multiple Choice

If a good is normal and its price increases,

• A)the income effect will be positive and the substitution effect will be positive.
• B)the income effect will be negative and the substitution effect will be negative.
• C)the income effect will be positive and the substitution effect will be negative.
• D)the income effect will be negative and the substitution effect will be positive.

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Definitions:

Corporate Social Responsibility (CSR)

A business model that helps a company be socially accountable to itself, its stakeholders, and the public.

Long-Term Profitability

The ability of a company to generate a consistent profit over an extended period, indicating financial health and sustainable business practices.

Tiered Pricing

A pricing strategy where a company offers different prices for the same product or service based on certain criteria, such as quantity purchased.

Aggressive Pricing

A strategy where products or services are offered at low or reduced prices to attract customers, gain market share, or drive competitors out of the market.