Suppose there is an increase in income in the community. If bagels are a normal good, this will cause:

Question

Quizplus · Accepted Answer

If bagels are a normal good, an increase in income will cause an increase in demand for bagels, leading to a rightward shift in the demand curve. This will result in a higher equilibrium price and quantity of bagels exchanged. Therefore, the best choice is B, as it is the only option where both equilibrium price and quantity increase.

Suppose There Is an Increase in Income in the Community