If cars are normal goods,a fall in income will
A)Increase the demand for cars
B)Decrease the demand for cars
C)Have no effect on the demand for cars
D)None of the above

Question

​If cars are normal goods,a fall in income will
A)​Increase the demand for cars
B)Decrease the demand for cars
C)Have no effect on the demand for cars
D)​None of the above

Quizplus · Accepted Answer

A fall in income will generally lead to a decrease in demand for normal goods, including cars. When people have less money, they are likely to cut back on their spending, and may postpone purchasing a car or opt for a cheaper model. Therefore, the demand for cars is likely to decrease in this scenario.

​If Cars Are Normal Goods,a Fall in Income Will

If Cars Are Normal Goods,a Fall in Income Will