Assume the following data: QD'X shows demand after revenue has increased The Question : b. What happens when income rises, price X drops from $ 5 to $ 3? c. What type of goods is commodity X, why?
Assume the following data: QD'X shows demand after revenue has increased The Question : b. What happens when income rises, price X drops from $ 5 to $ 3? c. What type of goods is commodity X, why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
4. Assume the following data:
QD'X shows demand after revenue has increased
The Question :
b. What happens when income rises, price X drops from $ 5 to $ 3?
c. What type of goods is commodity X, why?
Expert Solution
Step 1
The quantity demanded of a commodity changes in response to the price of the commodity and also is affected by other factors like the income, price of related goods, tastes and preferences, etc of the consumers. The changes takes place with the changes in all the real variables in the economy and affect the working of the firm.
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