Asked by
Maria Velasquez
on Nov 17, 2024
Verified
What would happen to the equilibrium price and quantity of smartphones if consumers' incomes rise and smartphones are a normal good?
A) Both the equilibrium price and quantity would increase.
B) Both the equilibrium price and quantity would decrease.
C) The equilibrium price would increase, and the equilibrium quantity would decrease.
D) The equilibrium price would decrease, and the equilibrium quantity would increase.
Normal Good
A normal good is one whose demand increases when consumers' incomes increase and falls when incomes decrease, all else being equal.
Equilibrium Quantity
The quantity of a good or service at which supply and demand are balanced in a market.
- Ascertain the variables contributing to the movement of demand and supply curves, which in turn affect equilibrium adjustments.
- Ascertain the impacts arising from variations in consumer income on normal and inferior goods.
Verified Answer
TT
Learning Objectives
- Ascertain the variables contributing to the movement of demand and supply curves, which in turn affect equilibrium adjustments.
- Ascertain the impacts arising from variations in consumer income on normal and inferior goods.