If,because of a price change,both the income and substitution effects are strong for a normal good,this segment of the demand curve must be:
A)unit-elastic.
B)vertical.
C)relatively price-elastic.
D)horizontal.

Question

Quizplus · Accepted Answer

If both the income and substitution effects are strong for a normal good, it means that the demand is sensitive to price changes. Therefore, this segment of the demand curve must be relatively price-elastic.

If,because of a Price Change,both the Income and Substitution Effects