Apples are a normal good, so if the price of an apple increases from 50 ¢ to 60¢, the quantity of apples demanded decrease because of

Question

Quizplus · Accepted Answer

Both substitution and income effects contribute to the decrease in quantity of apples demanded. The substitution effect occurs because as the price of apples increases, consumers tend to choose substitutes, such as other fruits or snacks, instead of apples. The income effect occurs because as the price of apples increases, consumers' purchasing power decreases, leading to a decrease in the quantity of all goods demanded, including apples.

Apples Are a Normal Good, So If the Price of an Apple