The Sofa Corporation's economist predicts that 'ceteris paribus, if incomes rise next year then we will have to invest in extra production capacity'. The economist is relying on the fact that the company's sofas:

Question

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The economist's prediction is based on the assumption that the sofas are normal goods, meaning that as consumer incomes rise, the demand for these sofas will also increase, necessitating additional production capacity.

The Sofa Corporation's Economist Predicts That 'Ceteris Paribus, If Incomes