Beef is a normal good. You observe that both the equilibrium price and quantity of beef has fallen over time. Which of the following would be most consistent with this observation?

Question

Quizplus · Accepted Answer

If the equilibrium price and quantity of beef have fallen over time, this suggests a decrease in demand for beef. If both the price and quantity have decreased, it is unlikely that there has been an increase in production technology or an increase in consumers' incomes. Option B about the price of chicken and steak sauce is not necessarily relevant, as it doesn't directly affect the demand for beef. Option D, suggesting a positively sloped demand curve, is incorrect, as beef is generally considered to have a negatively sloped demand curve (i.e. as price decreases, quantity demanded increases). Therefore, the most likely explanation for a decrease in both equilibrium price and quantity for beef is a shift in consumer tastes, away from beef and towards other meat options or non-meat options.

Beef Is a Normal Good