If the price of a normal good changes, the income effect of the price change will
A) produce a positively sloped demand curve.
B) reinforce the substitution effect.
C) always be to increase quantity demanded.
D) oppose the substitution effect.
E) always be larger than the substitution effect.

Question

Quizplus · Accepted Answer

The income effect for a normal good reinforces the substitution effect because as the price decreases, the consumer feels effectively richer, increasing the quantity demanded.

If the Price of a Normal Good Changes, the Income