Strawberries, a normal good, are produced in a perfectly competitive market. Average consumer incomes increase. This will cause the individual strawberry farmerʹs marginal revenue to ________ and their profit-maximizing level of output to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

When average consumer incomes increase, demand for a normal good like strawberries rises, leading to higher prices and marginal revenue for individual farmers. Consequently, their profit-maximizing level of output also increases.

Strawberries, a Normal Good, Are Produced in a Perfectly Competitive