After a price decrease for good X,the new consumer equilibrium level of good X will be:
A) higher than before the price change.
B) lower than before the price change.
C) indeterminate without more information.
D) the same as before the price change.

Question

Quizplus · Accepted Answer

The income effect and substitution effect work in opposite directions, so the net effect on quantity demanded is indeterminate without more information.

After a Price Decrease for Good X,the New Consumer Equilibrium