An increase in _____ will have an ambiguous (uncertain)effect on price.
A)tastes and preferences
B)the price of a substitute
C)the price of a complement
D)income

Question

Quizplus · Accepted Answer

An increase in income can have an ambiguous effect on price because it depends on whether the good is a normal good or an inferior good. For normal goods, an increase in income leads to an increase in demand, potentially raising prices. For inferior goods, an increase in income leads to a decrease in demand, potentially lowering prices.

An Increase in _____ Will Have an Ambiguous (Uncertain)effect on Price