SchoolRocks5173 SchoolRocks5173

27-12-2019
Business

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Assume that ice cream is a normal good. If the price of ice cream decreases, the substitution effect and the income effect will lead to which of the following changes in ice cream consumption?
A. Increase Decrease
B. Increase Increase
C. Increase/ No change

Respuesta :

salem21 salem21

28-12-2019

Answer:

C

Explanation:

Normally i would have chosen d none if there was any because it differs in supply and demand since the question didn't make it clear

Demand - price of ice-cream decreases then demand for substitution decreases but no effect on income.
Supply - price of ice-cream decreases then supply for substitution increases and still no effect on income.

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