If the price of a good falls,then the equilibrium consumption of that good:
A) increases if it is an inferior good.
B) decreases if it is a normal good.
C) remains the same.
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

If the good in question is an inferior good, then as its price falls, consumers will shift their consumption from other, more expensive goods towards it. This will result in an increase in equilibrium consumption.

If the Price of a Good Falls,then the Equilibrium Consumption