If income rises,then in the new consumer equilibrium
A)the marginal utility from normal goods increases.
B)the marginal utility from normal goods decreases.
C)the marginal utility from inferior goods increases.
D)total utility from inferior goods increases.
E)both B and C

Question

Quizplus · Accepted Answer

When income rises, consumers can afford to buy more normal goods, which leads to a decrease in the marginal utility from those goods due to the law of diminishing marginal utility. For inferior goods, as income increases, consumers tend to buy less of these, which can increase their marginal utility since they are consumed less frequently.

If Income Rises,then in the New Consumer Equilibrium