Suppose consumer income increases.If grass seed is a normal good,what happens to the equilibrium price of grass seed and producer surplus
A)They both decrease.
B)They both increase.
C)The equilibrium price will decrease, and producer surplus in the industry will increase.
D)The equilibrium price will increase, and producer surplus in the industry will decrease.

Question

Quizplus · Accepted Answer

When consumer income increases, the demand for normal goods like grass seed increases, leading to a higher equilibrium price and increased producer surplus.

Suppose Consumer Income Increases