If good A is a normal good and its price decreases, the _____ effect will cause a(n) _____ in consumption of it.
A) substitution; decrease
B) income; decrease
C) income; increase
D) substitution effect and the income; decrease

Question

Quizplus · Accepted Answer

For a normal good, a decrease in price leads to an increase in consumption due to the income effect, as the consumer feels effectively richer and can afford to buy more.

If Good a Is a Normal Good and Its Price