In year 1 the average price of X is $10, and in year 2 the average price of X is $23. If consumers buy more units of X in year 2 than in year 1, it follows that
A)the law of supply does not hold for good X.
B)demand for good X could be lower in year 2 than in year 1.
C)supply of good X could be less in year 2 than in year 1.
D)good X buyers have received an increase in income between year 1 and year 2, and good X is a normal good.
E)good X buyers have received a decrease in income between year 1 and year 2, and good X is a normal good.

Question

Quizplus · Accepted Answer

If consumers buy more units of X despite the price increase, it suggests that their income has increased, making them able to afford more of the normal good X.

In Year 1 the Average Price of X Is $10