Normal goods are those for which demand decreases as. A. the price of a substitute falls B. the price of a complement falls C. the good's own price rises D. income decreases
Question
Normal goods are those for which demand decreases as. A. the price of a substitute falls B. the price of a complement falls C. the good's own price rises D. income decreases
Solution
The correct answer is D. income decreases. Normal goods are those goods for which demand increases when income increases and decreases when income decreases, ceteris paribus (all other factors remaining constant). So, when income decreases, the demand for normal goods also decreases.
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